Tuesday, June 30, 2009

Enterprise acquiring Teppco in $3.3 billion deal

HOUSTON - Enterprise Products Partners said on June 29 that it is acquiring Teppco Partners in an all-stock deal valued at $3.3 billion, forming what they said would be the largest publicly traded energy partnership.
The move unites the two closely linked pipeline operators, which are controlled by a general partnership company owned by the Houston billionaire Dan Duncan.
Under the terms of the deal, Teppco unit holders would receive 1.24 Enterprise units, valued at $31.36, for each of their Teppco units. That represents a 9.3 percent premium over Teppco’s closing price on June 26.
The deal is valued at about $500 million more than the $2.8 billion cash-and-stock deal Enterprise first put on the table in March. That offer was later rejected by Teppco’s management as being too low.
Teppco and Enterprise are both master limited partnerships.
The deal brings Teppco officially into the Enterprise family, allowing the company to benefit from Enterprise’s stronger balance sheet and more stable yield payout. Enterprise gains by acquiring a more diverse mix of products and shipping routes via Teppco’s extensive oil products network.
The combined partnership will control a significant amount of midstream energy assets including 48,000 miles of pipelines; 200 million barrels of natural gas liquid, refined product and crude oil storage capacity; 27 billion cubic feet of natural gas storage capacity; 60 product terminals and the largest inland tank barge companies in the United States.

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