Via Columbus Business Journal
Marathon Petroleum had 2 competitors for MarkWest, filing reveals
New details from a Marathon Petroleum Corp. subsidiary reveal two other companies were fighting for the rights to acquire MarkWest Energy Partners, a $2.01 billion oil and gas company with strong exposure in eastern Ohio.
MarkWest and Marathon spent all of 2014 discussing a joint venture and other partnerships, according to a Securities and Exchange Commission filing. At the time, all the talk centered on specific corporate development – there was no discussion of merging.
When the CEOs of both companies met in Denver to discuss the joint venture on Feb. 13, Marathon CEO Gary Heminger asked MarkWest boss Frank Semple about a broader transaction, according to the proxy filing from Marathon subsidiary MPLX LP.
Semple said then the company preferred to be a standalone company.
But this is the oil and gas industry, and circumstances can change in an instant. Last month, MarkWest said it would merge with Findlay-based Marathon (NYSE:MPC) in a $15.8 billion deal with big implications for Ohio oil and gas activity.
Here’s how it happened, according to the filing: In March, MarkWest’s (NYSE:MWE) board met to discuss larger strategic moves and the impact low commodity prices were having on the industry. That led to a March 17 meeting between executives of both companies and Semple acknowledging the advantages an acquisition could bring.
In late May, MarkWest received an offer from an unnamed company dubbed Company A. The filing describes the company as a natural gas company that has an MLP, a popular funding mechanism in the energy industry.
The Marathon subsidiary (NYSE:MPLX) confirmed its first offer on July 3. Three days later, the mystery company increased its bid. Two days after that, MarkWest received an offer from another company dubbed Company B, for which there are few details.
Five days after MPLX confirmed its offer, investment firm Jefferies LLC advised MarkWest to take it. On July 11, the board of directors for both companies approved the deal. Shareholders still have to approval it.
Since the announcement, MarkWest reached a $1 billion agreement with Ascent Resources on a pipeline gathering system in eastern Ohio’s Utica shale play.