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Enterprise, Oiltanking Partners detail merger

Enterprise Products Partners LP and Oiltanking Partners LP have released further details of their merger agreement, following the first announcement in October. Under the terms of the merger, Oiltanking Partners would merge with a subsidiary of Enterprise in a unit-for-unit exchange. Unitholders of Oiltanking Partners (other than Enterprise and its subsidiaries) would receive 1.3 Enterprise common units for each Oiltanking Partners common unit.

 

This exchange ratio represents a 5.6 percent premium to Oiltanking Partners unitholders based on the respective closing prices for Enterprise and Oiltanking Partners common units on 30 September 2014, the day before the merger was originally proposed.

 

Relative to the respective closing prices for Enterprise and Oiltanking Partners common units on 10 November 2014, the day before the parties entered into the merger agreement, the 1.3 exchange ratio represents a 10.4 permium to Oiltanking Partners unit holders.

 

Based on the latest cash distribution declared by Enterprise and Oiltanking Partners with respect to the third quarter of 2014, this exchange ratio would result in a 74 percent increase in cash distributions for Oiltanking Partners unit holders.

 

On 1 October Enterprise announced that it had acquired the general partner and related incentive distribution rights, 15,899,802 common units and 38,899,802 subordinated units in Oiltanking Partners held by Oiltanking Holding Americas, Inc (Oiltanking Holding). Enterprise paid a total of US$4.41 billion to Oiltanking Holding comprised of $2.21 billion in cash and 54,807,352 Enterprise common units.

 

Completion is expected to occur in early 2015 and the total consideration paid by Enterprise for the Oiltanking Partners general partner and related incentive distribution rights and the limited partner units would be approximately $6 billion.

 

 

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