A firm known for big corporate shakeups is behind bid to buy Citgo

HOUSTON – The Houston Chronicle reports that several hundred employees at Citgo Petroleum’s Houston headquarters can be sure of only one thing as an affiliate of a Florida hedge fund prepares to buy the company: change is coming. Elliott Management is known for its strong hand. It seizes control of companies and squeezes value from them by shaking up management, slashing spending and creating more efficient versions that are more profitable for shareholders. Now, Elliott is setting its sights on Citgo. A U.S. court aims to sell Venezuelan-owned Citgo at auction to Amber Energy, a new company backed by Elliott, and use the proceeds to pay some of Venezuela’s debts. Amber Energy won the bidding process for Citgo, according to a Friday court filing, after it agreed to buy the oil refining company based in Houston for $7.29 billion. The deal still requires approval from the U.S. District Court in Delaware, which will consider objections over the coming weeks.

Citgo, which directly employs roughly 3,300 people as well as 2,500 contractors, owns three major refineries in Corpus Christi, Lake Charles, La., and Lemont, a Chicago suburb. It also operates several pipelines and dozens of terminals in the East Coast and Great Lakes regions, where it stores and distributes gasoline, diesel and jet fuel. At the helm of the newly launched Amber Energy are two refining industry veterans who built and sold refining companies to larger ones: Gregory Goff, a board member at Exxon Mobil who was previously the chief executive of Andeavor, and Jeff Stevens, previously the chief executive of Western Refining. Does this new Elliott affiliate plan to grow Citgo, or sell it for parts? The answer to that question could determine the fate of Citgo’s Houston headquarters. Amber said in a statement that it plans to reinvest in the company, and that it would “potentially pursue” larger strategic investments that could make the company more profitable. It declined to comment further. Amber’s statements about growth could be good news for employees, said Mike Collier, transaction advisory services partner with Weaver, a Houston-based accounting firm. Elliott is following a common private equity template with Citgo, which has likely had to defer big-picture investments while it waits for the dust to settle in the long-running dispute over its assets.