By Lisa Kerner
Charlotte, N.C., Sept. 6 - MarkWest Energy Partners, LP and MarkWest Hydrocarbon, Inc. agreed to a merger transaction valued at approximately $734 million.
Under the terms of the companies' merger agreement, MarkWest Hydrocarbon shareholders will receive about 15.4 million common units of MarkWest Energy plus $240 million cash, or $61.12 per share.
MarkWest Hydrocarbon shareholders may elect to receive 1.285 common units of MarkWest Energy and $20.00 cash, all cash, or all common units, subject to proration.
The $61.12-per-share consideration is a 22% premium over the closing price of MarkWest Energy units on Sept. 5, according to a company news release.
Following the merger's close, MarkWest Hydrocarbon will become a direct, wholly owned subsidiary of MarkWest Energy and managed by the current MarkWest Energy management team. Three members of MarkWest Hydrocarbon's board of directors will join the board of MarkWest Energy's general partner.
The merger is expected to close in late 2007 or early 2008.
"This merger is a tremendous win for all of our equity holders and will unlock substantial long-term value for MarkWest Energy Partners," MarkWest Energy president and chief executive officer Frank Semple said in the release.
"The transaction addresses two major objectives of our growth strategy. First, and most importantly, the incentive distribution rights will be eliminated, which will significantly reduce our future cost of equity capital. Second, we will streamline our corporate structure and reduce the costly duplication of services required to maintain two public companies," Semple added.
Advisers for the merger included Lehman Brothers, RBC Capital Markets and Merrill Lynch & Co. Debt financing is being arranged by RBC Capital Markets.
MarkWest Energy is a Denver-based publicly traded limited partnership and processor of natural gas in the Northeast. MarkWest Hydrocarbon, a natural gas marketer, controls and operates MarkWest Energy.
| Acquirer: | MarkWest Energy Partners, LP
|
| Target: | MarkWest Hydrocarbon, Inc.
|
| Transaction total: | $734 million
|
| Price per share: | $61.12
|
| Announcement date: | Sept. 6
|
| Expected closing: | Late 2007 or early 2008
|
| Stock price for target: | Amex: MWP: $50.06 on Sept. 5
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
