Targa Resources Corp. and Targa Resources Partners LP have
agreed to acquire Atlas Energy LP and Atlas Pipeline Partners LP in
deals the companies valued at $7.7 billion.
Shares of Atlas Energy rose 14% in recent premarket trading,
while Atlas Pipeline's stock jumped 13%.
Targa Resources Partners is set to buy Atlas Pipeline for $38.66
a share in common units and cash, or a 15% premium over Atlas
Pipeline's closing price Friday. The companies pegged the deal at
$5.8 billion, including $1.8 billion in debt.
The companies valued Targa Resources Corp.'s deal to buy Atlas
Energy at nearly $1.87 billion in shares and cash, with the
completion of the deal coming after Atlas Energy spins off its
non-midstream assets. The assets that will remain after the spinoff
include 100% general partner and incentive distribution rights, as
well as 25 million shares, of Atlas Energy's Atlas Resource
Partners LP unit.
Targa Resources Corp. said it expects its distributions to grow
by about 35% next year after its deal closes, while Targa Resources
Partners expects 11% to 13% distribution growth.
The transactions are expected to close during the first quarter
next year.
The deals announced Monday reflect the latest in a flurry of big
deals in the energy sector, particularly those involving master
limited partnerships.
The partnerships, which are also known as MLPs, often make big
deals to keep their energy portfolios robust in order to meet
investors' demands. MLPs have light corporate tax loads and
distribute most of their profit to investors.
Write to Michael Calia at michael.calia@wsj.com
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