ETP Offers to Buy PennTex Midstream Outstanding Stock

Energy Transfer Partners (ETP) tendered an offer to buy all of outstanding common stock in PennTex Midstream Partners that it doesn’t own for $20 per unit in cash. The tender offer will expire June 19, unless the offer is extended in accordance with its terms. ETP owns 32.4% of the outstanding PennTex common units/

There is no assurance the tender offer will be completed, however. Among other things, the ETP offer requires that it and its affiliates own 80% of PennTex common at the completion of any transaction, unless such condition is waived by ETP. The tender offer is also subject to other customary conditions. ETP expects to pay the offer consideration from cash on hand or borrowings under ETP’s credit facilities.

Following the purchase by ETP, the company will exercise its limited call right provided for in the PennTex partnership agreement, which will result in the acquisition by ETP of all outstanding PennTex common units. If the limited call right is exercised, the remaining holders of PennTex common units will receive at least the same cash price per common unit as paid in the tender offer.

Among its holdings, PennTex Midstream owns the PennTex Gathering Pipeline, a 35-mile rich natural gas gathering system, consisting of 30.3 miles of 12-inch pipeline, 1.4 miles of 20-inch pipeline, and 3.1 miles of 24-inch  pipeline providing access to the Lincoln Parish Plant and to the Minden Plant owned and operated by DCP Midstream Partners

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