From the Houston Business Journal
Dallas-based Energy Transfer Partners LP (ticker: ETP) launched an unsolicited tender offer May 18 to buy the rest of Houston-based PennTex Midstream Partners LP’s (ticker: PTXP) common units for $20 each.
The tender offer expires June 19, and the transaction’s value is estimated at $280.25 million, according to a filing with the U.S. Securities and Exchange Commission. PennTex plans to share its formal position regarding the tender offer with unitholders within 10 business days via an SEC filing, the company said in a press release May 19.
ETP already owns about 32.4 percent of PennTex’s outstanding common units. ETP only needs another 47.6 percent to reach a total of 80 percent and exercise its limited call right to acquire all remaining common units. If ETP exercises that right, PennTex’s remaining unitholders will receive at least the same cash price per common unit as paid in the tender offer, according to a May 18 press release.
Last year, ETP bought a significant stake in PennTex for about $640 million. That deal included 100 percent of PennTex’s general partner, all of its distribution rights, 6.3 million common units and all 20 million subordinated units of PTXP. Those common and subordinated units represented about 65 percent of the total limited partner interests in PennTex.
That deal made PennTex a wholly owned subsidiary of ETP when it closed in November. At the time, ETP entered into a six-month evaluation agreement with PennTex. For that six-month period, ETP agreed not to undertake a tender offer regarding the outstanding PTXP common units or other business combination with PennTex without first seeking and receiving the approval of the tender offer price or other business combination by the independent directors of the board.
PennTex is a master limited partnership that owns midstream assets in the Terryville Complex in northern Louisiana. The assets include a rich natural gas gathering system, two cryogenic natural gas processing plants totaling 400 million cubic feet per day of capacity, along with residue gas and natural gas liquids pipelines.
“These assets complement ETP’s existing midstream footprint in the region and position ETP for significant growth and value creation,” Energy Transfer Partners said in an October press release.
Late last month, ETP completed its merger with Pennsylvania-based Sunoco Logistics Partners LP (NYSE: SXL). ETP became a wholly owned subsidiary of SXL, which then changed its name to Energy Transfer Partners LP, and its common units changed to the “ETP” ticker symbol.
