Exchange of 21 million ETP common units owned
by ETE for 100% of SUN GP interest and IDRs
Additional two-year IDR subsidy from ETE to
ETP
Transaction is highly cash flow accretive to
ETP
ETE benefits from SUN growth and future IDR
subsidy reduction with no impact on its current or future
distributions
Energy Transfer Partners, L.P. (NYSE: ETP) and Energy
Transfer Equity, L.P. (NYSE: ETE) announced today the exchange
of 21 million ETP common units, currently owned by ETE, for 100% of
the general partner (GP) interest and the incentive distribution
rights (IDRs) of Sunoco LP (NYSE: SUN). In addition, as part of
this transaction, ETE has agreed to provide ETP a $35 million
annual IDR subsidy for two years as described below.
The cash flow accretion expected to be realized by ETP from this
transaction is more than $0.30 per common unit per annum, which
will continue to support ETP’s attractive distribution growth going
forward.
For ETE, this transaction continues its transition to a pure
play general partner for the overall Energy Transfer group. Pro
forma for this transaction, ETE expects to maintain its
distribution growth rate while migrating to its traditional 1.0x
distribution coverage ratio.
In connection with the original acquisition of Susser Holdings
Corporation (Susser) by ETP in August 2014, ETE agreed to provide
ETP an annual $35 million IDR subsidy for 10 years, subject to
automatic termination in the event that ETE acquired the GP
interest and IDRs of SUN in exchange for ETP common units owned by
ETE. As part of the current transaction, ETE has agreed to provide
ETP a $35 million IDR subsidy for an additional two years (through
June 30, 2017).
Transaction Rationale:
For ETP:
- Reduces ETP’s common unit count by
almost 5% and has a commensurate reduction to the amount of
distributions to be paid to ETE with respect to the ETP IDRs;
- Solidifies current distribution
increases while continuing to strengthen its distribution coverage
ratio;
- The IDR subsidy for two years provides
additional near term cash flow benefits;
- Crystallizes tremendous value
maximization from the overall Susser transaction in less than 12
months; and
- Together with ETP’s focus on its
organic growth projects, this transaction should be a positive
catalyst for ETP’s unit price and help improve its current cost of
capital.
For ETE:
- Reinforces ETE’s strategy to become a
traditional GP within the Energy Transfer family;
- Increases in value of the underlying
SUN GP creates incremental upside to ETE;
- Direct benefit from expected dynamic
drop down and third party growth at SUN; and
- Continued upside from ETP IDRs as ETP
accelerates its future distribution growth.
ETP and ETE expect there will be no credit ratings impact from
this transaction. Following this transaction, SUN will no longer be
consolidated for accounting purposes by ETP, but instead will
appear in the consolidated financial statements for ETE.
This transaction is expected to close in August 2015 after the
record date for second quarter distributions for both the SUN GP
interest and IDRs and ETP common units, but will be effective as of
July 1, 2015.
Tudor, Pickering, Holt & Co. acted as financial advisor to
the ETP conflicts committee. Akin Gump Strauss Hauer & Feld LLP
acted as legal advisor to ETP and Richard Layton & Finger, P.A.
acted as legal advisor to the ETP conflicts committee.
Credit Suisse acted as financial advisor to the ETE conflicts
committee. Latham & Watkins LLP acted as legal advisor to ETE
and Potter Anderson & Corroon LLP acted as legal advisor to the
ETE conflicts committee.
Energy Transfer Partners, L.P. (NYSE: ETP)
is a master limited partnership owning and operating one of the
largest and most diversified portfolios of energy assets in the
United States. ETP’s subsidiaries include Panhandle Eastern Pipe
Line Company, LP (the successor of Southern Union Company) and Lone
Star NGL LLC, which owns and operates natural gas liquids storage,
fractionation and transportation assets. In total, ETP currently
owns and operates more than 62,000 miles of natural gas and natural
gas liquids pipelines. ETP also owns the general partner, 100% of
the incentive distribution rights, and approximately 67.1 million
common units in Sunoco Logistics Partners L.P. (NYSE: SXL), which
operates a geographically diverse portfolio of crude oil and
refined products pipelines, terminalling and crude oil acquisition
and marketing assets. ETP owns 100% of Sunoco, Inc. and 100% of
Susser Holdings Corporation. Additionally, ETP owns the general
partner, 100% of the incentive distribution rights and
approximately 44% of the limited partner interests in Sunoco LP
(formerly Susser Petroleum Partners LP) (NYSE: SUN), a wholesale
fuel distributor and convenience store operator. ETP’s general
partner is owned by Energy Transfer Equity, L.P. (NYSE: ETE). For
more information, visit the Energy Transfer Partners, L.P. website
at www.energytransfer.com.
Energy Transfer Equity, L.P. (NYSE:ETE) is a master
limited partnership which owns the general partner and 100% of the
incentive distribution rights (IDRs) of Energy Transfer Partners,
L.P. (NYSE: ETP), approximately 23.6 million ETP common units,
approximately 81.0 million ETP Class H Units, which track 90% of
the underlying economics of the general partner interest and IDRs
of Sunoco Logistics Partners L.P. (NYSE: SXL), and 100 ETP Class I
Units. On a consolidated basis, ETE’s family of companies owns and
operates approximately 71,000 miles of natural gas, natural gas
liquids, refined products, and crude oil pipelines. For more
information, visit the Energy Transfer Equity, L.P. website at
www.energytransfer.com.
Sunoco LP (NYSE: SUN) is a master limited partnership
(MLP) that primarily distributes motor fuel to convenience stores,
independent dealers, commercial customers and distributors. SUN
also operates more than 150 convenience stores and retail fuel
sites. SUN conducts its business through wholly owned subsidiaries,
as well as through its 31.58 percent interest in Sunoco, LLC, in
partnership with an affiliate of its parent company, Energy
Transfer Partners (NYSE: ETP). While primarily engaged in natural
gas, natural gas liquids, crude oil and refined products
transportation, ETP also operates a retail business through its
interest in Sunoco, LLC, as well as wholly owned subsidiaries,
Sunoco, Inc. and Stripes LLC that operate approximately 1,100
convenience stores and retail fuel sites. For more information,
visit the Sunoco LP website at www.SunocoLP.com.
Forward-Looking Statements
This press release may include certain statements concerning
expectations for the future that are forward-looking statements as
defined by federal law. Such forward-looking statements are subject
to a variety of known and unknown risks, uncertainties, and other
factors that are difficult to predict and many of which are beyond
management’s control. Among those is the risk that the anticipated
benefits from the proposed transaction cannot be fully realized. An
extensive list of factors that can affect future results are
discussed in the Partnerships’ Annual Reports on Form 10-K and
other documents filed from time to time with the Securities and
Exchange Commission. The Partnerships undertake no obligation to
update or revise any forward-looking statement to reflect new
information or events.
The information contained in this press release is available on
ETP’s and ETE’s website at www.energytransfer.com.
Legend Related to The Williams Companies, Inc.
Transaction:
Forward-looking Statements
This communication may contain forward-looking
statements. These forward-looking statements include, but are
not limited to, statements regarding ETE’s offer to
acquire The Williams Companies, Inc. (“Williams”), its
expected future performance (including expected results of
operations and financial guidance), and the combined company's
future financial condition, operating results, strategy and plans.
Forward-looking statements may be identified by the use of the
words "anticipates," "expects," "intends," "plans," "should,"
"could," "would," "may," "will," "believes," "estimates,"
"potential," "target," "opportunity," "designed," "create,"
"predict," "project," "seek," "ongoing," "increases" or "continue"
and variations or similar expressions. These statements are based
upon the current expectations and beliefs of management and are
subject to numerous assumptions, risks and uncertainties that
change over time and could cause actual results to differ
materially from those described in the forward-looking statements.
These assumptions, risks and uncertainties include, but are not
limited to, assumptions, risks and uncertainties discussed in the
most recent Annual Report on Form 10-K and Quarterly Report on Form
10-Q for each of ETE, ETP, Sunoco Logistics Partners L.P. (“SXL”)
and Sunoco LP (“SUN”) filed with the U.S. Securities and
Exchange Commission (the "SEC") and assumptions, risks and
uncertainties relating to the proposed transaction, as detailed
from time to time in ETE’s, ETP’s, SXL’s and SUN’s filings with
the SEC, which factors are incorporated herein by reference.
Important factors that could cause actual results to differ
materially from the forward-looking statements we make in this
communication are set forth in other reports or documents that ETE,
ETP, SXL and SUN file from time to time with the SEC include,
but are not limited to: (1) the ultimate outcome of any potential
business combination transaction between ETE, ETE Corp. and
Williams including the possibilities that ETE will not pursue
a transaction with Williams and
that Williams will continue to reject a transaction with
ETE and fail to terminate its existing merger agreement with
Williams Partners L.P. (“WPZ”); (2) if a transaction between
ETE, ETE Corp. and Williams were to occur, the
ultimate outcome and results of integrating the operations of ETE
and Williams, the ultimate outcome of ETE’s operating strategy
applied to Williams and the ultimate ability to realize cost
savings and synergies; (3) the effects of the business combination
transaction of ETE, ETE Corp. and Williams, including the
combined company's future financial condition, operating results,
strategy and plans; (4) the ability to obtain required regulatory
approvals and meet other closing conditions to the transaction,
including approval under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and Williams stockholder
approval, on a timely basis or at all; (5) the reaction of the
companies’ stockholders, customers, employees and counterparties to
the proposed transaction; (6) diversion of management time on
transaction-related issues; (7) unpredictable economic conditions
in the United States and other markets, including
fluctuations in the market price of ETE common units and ETE
Corp. common shares; (8) the ability to obtain the intended tax
treatment in connection with the issuance of ETE common shares to
Williams stockholders; (9) the ability to maintain Williams’ and
WPZ’s current credit ratings and (10) the risks and uncertainties
detailed by Williams and WPZ with respect to their
respective businesses as described in their respective reports and
documents filed with the SEC. All forward-looking statements
attributable to us or any person acting on our behalf are expressly
qualified in their entirety by this cautionary statement. Readers
are cautioned not to place undue reliance on any of these
forward-looking statements. These forward-looking statements speak
only as of the date hereof. ETE undertakes no obligation to update
any of these forward-looking statements to reflect events or
circumstances after the date of this communication or to reflect
actual outcomes.
Additional Information
This communication does not constitute an offer to buy or
solicitation of an offer to sell any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the U.S.
Securities Act of 1933, as amended. This communication relates to a
proposal which ETE has made for a business combination
transaction with Williams. In furtherance of this proposal and
subject to future developments, ETE and ETE Corp. (and, if a
negotiated transaction is agreed, Williams) may file one or
more registration statements, proxy statements or other documents
with the SEC. This communication is not a substitute for any
proxy statement, registration statement, prospectus or other
document ETE, ETE Corp. or Williams may file with
the SEC in connection with the proposed transaction.
INVESTORS AND SECURITY HOLDERS OF ETE AND WILLIAMS ARE URGED TO
READ THE PROXY STATEMENT(S), REGISTRATION STATEMENT, PROSPECTUS AND
OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF
AND WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED BUSINESS COMBINATION TRANSACTION.
Any definitive proxy statement(s) (if and when available) will be
mailed to stockholders of Williams. Investors and security
holders will be able to obtain free copies of these documents (if
and when available) and other documents filed with
the SEC by ETE through the web site maintained by
the SEC at http://www.sec.gov. Copies of the
documents filed by ETE and ETE Corp. with the
SEC will be available free of charge on ETE’s website
at www.energytransfer.com or by contacting Investor
Relations at 214-981-0700.
ETE and its directors, executive officers and other members of
management and employees may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction.
Information regarding the directors and officers of ETE’s general
partner is contained in ETE’s Annual Report on Form 10-K filed with
the SEC on March 2, 2015 (as it may be amended from
time to time). Additional information regarding the interests of
such potential participants will be included in the proxy
statement/prospectus and other relevant documents filed with
the SEC if and when they become available. Investors
should read the proxy statement/prospectus carefully when it
becomes available before making any voting or investment decisions.
You may obtain free copies of these documents from ETE using the
sources indicated above.
ETE Exchange Offer
This communication is not a substitute for any registration
statement, prospectus or other document ETE and ETE
Corp. may file with the SEC in connection with any
offer to ETE unitholders to exchange their ETE common units for
common shares in ETE Corp. In connection with any offer
to ETE unitholders to exchange their ETE common units for common
shares in ETE Corp., ETE and ETE Corp. may file a
registration statement and other documents with the SEC.
INVESTORS AND SECURITY HOLDERS OF ETE ARE URGED TO READ THE
REGISTRATION STATEMENT AND OTHER DOCUMENTS FILED WITH THE SEC
CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED OFFER
TO EXCHANGE. Investors and security holders may obtain
free copies of these documents if any when they become available
from ETE using the sources indicated above.
View source version on
businesswire.com: http://www.businesswire.com/news/home/20150621005058/en/
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150715005704/en/
Investor Relations:Energy TransferBrent Ratliff,
214-981-0795orLyndsay Hannah, 214-840-5477orInnisfree M&A
IncorporatedArthur Crozier / Jennifer Shotwell / Scott
Winter212-750-5833orMedia Relations:Granado Communications
GroupVicki Granado, 214-599-8785Cell: 214-498-9272orBrunswick
GroupSteve Lipin, 212-333-3810orMark Palmer, 214-254-3790
Sunoco Logistics Partners L.P. (NYSE:ETP)
Historical Stock Chart
From Mar 2024 to Apr 2024
Sunoco Logistics Partners L.P. (NYSE:ETP)
Historical Stock Chart
From Apr 2023 to Apr 2024