Tallgrass Energy Partners Unitholders Overwhelmingly Approve Merger with Tallgrass Energy GP; Closing Expected on June 29, 2018
Tallgrass Energy Partners, LP (NYSE: TEP) (“TEP”) and Tallgrass Energy
GP, LP (NYSE: TEGP) (“TEGP”) announced that at a special meeting today,
TEP unitholders overwhelmingly approved the stock-for-unit merger
transaction in which TEGP will acquire the approximately 47.6 million
TEP common units held by the public at a ratio of 2.0 TEGP Class A
shares for each outstanding TEP common unit. Approximately 85 percent of
the outstanding TEP common units were voted and, of that amount, greater
than 99 percent voted in favor of the merger.
“Today’s vote validates our decision to merge TEGP and TEP,” said
President and CEO David G. Dehaemers Jr. “Overwhelming unitholder
support confirms our belief that this was a creative and uniformly
positive transaction resulting in favorable economics for equity holders
of both securities. With a streamlined corporate structure, lower cost
of capital, broader investor appeal, strong balance sheet and healthy
dividend coverage, Tallgrass Energy is well-positioned to continue its
path as one of the nation’s leading pipeline owner/operators.”
The merger transaction is expected to close on June 29, 2018 and be
effective as of June 30, 2018. Upon completion of the transaction, TEGP
will change its name to Tallgrass Energy, LP. Beginning July 2, 2018,
TEGP’s Class A shares will trade on the NYSE under the ticker symbol
“TGE” and TEP’s common units will no longer be publicly traded.
Merger Transaction Overview
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Under the terms of the Agreement and Plan of Merger, TEGP will acquire
the approximately 47.6 million TEP common units held by the public at
a fixed exchange ratio of 2.0 TEGP Class A shares for each outstanding
common unit
-
Incentive Distribution Rights will be eliminated, reducing TGE’s
equity cost of capital and enhancing the accretion from growth
projects and M&A transactions
-
Single public entity reduces complexity for investors, further aligns
interests of all Tallgrass Energy equity holders and streamlines
governance
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TGE will be taxed as a C-Corp (1099 issuing entity), providing
increased equity market depth
-
No cash federal income taxes expected at TGE for a period currently
estimated to be at least 10 years
About Tallgrass Energy
Tallgrass Energy is a family of companies that includes publicly traded
partnerships Tallgrass Energy Partners, LP (NYSE: TEP) and Tallgrass
Energy GP, LP (NYSE: TEGP). Operating across 11 states, Tallgrass is a
growth-oriented midstream energy operator with transportation, storage,
terminal, water, gathering and processing assets that serve some of the
nation’s most prolific crude oil and natural gas basins.
To learn more, please visit our website at www.tallgrassenergy.com.
Additional Information and Where to Find it
In connection with the transactions referred to in this material, TEGP
filed a registration statement on Form S-4 with the Securities and
Exchange Commission (“SEC”) that includes a preliminary proxy statement
for the TEP unitholders. The registration statement was declared
effective by the SEC on May 9, 2018, and TEP commenced mailing the
definitive proxy statement/prospectus to its unitholders on or about May
23, 2018. This material is not a substitute for the proxy
statement/prospectus or registration statement or for any other document
that TEGP or TEP may file with the SEC in connection with the proposed
transactions. On June 26, 2018, TEP’s unitholders approved the Agreement
and Plan of Merger and the transactions contemplated thereby at a
special meeting.
INVESTORS AND SECURITY HOLDERS OF TEGP AND TEP ARE URGED TO READ THE
PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY
CONTAIN IMPORTANT INFORMATION.
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of any
vote or approval.
Investors and security holders are able to obtain free copies of the
proxy statement/prospectus and will be able to obtain free copies of
other documents filed with the SEC by TEGP or TEP through the website
maintained by the SEC at http://www.sec.gov.
Copies of the documents filed with the SEC by TEGP and TEP will be
available free of charge on TEGP’s and TEP’s website at www.tallgrassenergylp.com,
in the “Investor Relations” tab near the top of the page, or by
contacting TEGP’s and TEP’s Investor Relations Department
at 913-928-6012.
Participants in the Solicitation
TEGP and TEP and their respective general partner’s directors and
executive officers may be considered participants in the solicitation of
proxies with respect to the proposed transactions under the rules of the
SEC. Information about the directors and executive officers of TEGP’s
general partner may be found in its 2017 Form 10-K filed with the SEC on
Feb. 13, 2018, and any subsequent statements of changes in beneficial
ownership filed with the SEC. Information about the directors and
executive officers of TEP may be found in its 2017 Form 10-K filed with
the SEC on Feb. 13, 2018, and any subsequent statements of changes in
beneficial ownership filed with the SEC. These documents can be obtained
free of charge from the sources indicated above. Additional information
regarding the participants in the proxy solicitations and a description
of their direct and indirect interests, by security holdings or
otherwise, will also be included in any proxy statement and other
relevant materials to be filed with the SEC when they become available.
Cautionary Note Concerning Forward-Looking
Statements
Disclosures in this press release contain forward-looking statements.
All statements, other than statements of historical facts, included in
this press release that address activities, events or developments that
management expects, believes or anticipates will or may occur in the
future are forward-looking statements. Without limiting the generality
of the foregoing, forward-looking statements contained in this press
release specifically include whether the merger transaction between TEP
and TEGP will be closed on June 29, 2018, or at all, the expected
effective date of the merger transaction, the expected name change of
TEGP and the public trading changes of TEGP and TEP upon completion of
the transaction, statements regarding the expected benefits of the
proposed transaction, and that TGE does not expect to pay cash federal
income taxes for a period of at least 10 years. Such statements are
subject to a number of assumptions, risks and uncertainties, many of
which are beyond the control of TEP and TEGP, which may cause actual
results to differ materially from those implied or expressed by the
forward-looking statements, and other important factors that could cause
actual results to differ materially from those projected, including
those set forth in reports filed by TEP and TEGP with the SEC. Any
forward-looking statement applies only as of the date on which such
statement is made, and TEP and TEGP do not intend to correct or update
any forward-looking statement, whether as a result of new information,
future events or otherwise, except as required by law.
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