Both companies’ boards of directors have approved the acquisition.   The purchase price of $340 million is expected to be paid in promissory notes with an aggregate original principal amount of $150 million and approximately 3.8 million HEP common units valued at $190 million based upon the volume-weighted average price for the 10 trading days which ended Oct. 7, 2011.    
In connection with the closing of the proposed transaction, HollyFrontier and HEP expect to enter into 15-year throughput agreements containing minimum annual revenue commitments from HollyFrontier. HEP expects the acquisition to result in an estimated $47 million of incremental annual revenue and to be accretive to unit holders.    
The proposed transaction is expected to close in November, after the anticipated record date for third quarter 2011 distributions for HEP common units.    
The assets being acquired consist of:    
— At HollyFrontier’s 135,000-b/d El Dorado refinery: approximately 3.7 million bbl of hydrocarbon storage tanks; one refined products truck loading rack and one propane truck loading rack; and related refined product pipeline connections. 
 — At HollyFrontier’s 52,000-b/d Cheyenne refinery: approximately 1.8 million bbl of hydrocarbon storage tanks; one refined products truck loading rack, two propane loading spots, and three crude oil LACTs (Lease Automatic Custody Transfer units); and a crude receiving pipeline.    
Subsidiaries of HollyFrontier currently own a 34% interest (including the general partner interest) in HEP. If the asset transaction closes as anticipated, subsidiaries of HollyFrontier will own a 44% interest (including a 2% general partner interest) in HEP.