Wednesday, February 23, 2011

Enterprise Products makes $2.41 billion offer for Duncan Energy

HOUSTON, Texas - Enterprise Products Partners LP (NYSE: EPD) has offered to acquire Duncan Energy Partners LP (NYSE: DEP) in an all-unit deal valued at about $2.41 billion.

Such an acquisition would see the web of oil-and-gas pipeline and processing companies controlled by the family of late Texas billionaire Dan Duncan, who died last year, further consolidated.

Enterprise owns Duncan's general partner and about 58 percent of Duncan's common units. Late last year, Enterprise merged with Enterprise GP Holdings LP.

Duncan has "received Enterprise's merger proposal and will begin our review process," said William A. Bruckmann III, chairman of the audit, conflicts and governance committee of DEP’s general partner.

Enterprise's results have improved in recent quarters thanks to its $3.3 billion merger with Teppco Partners LP in late 2009, which created one of the U.S.'s biggest pipeline companies. Enterprise is increasing its focus on developing pipeline projects serving the Eagle Ford and Haynesville shale gas fields in Texas and Louisiana.

Advances in technology and increased investment have led to surging natural-gas supply as companies tap resources trapped in shale rock formations.

Earlier this month, Enterprise reported its fourth-quarter profit soared, helped by production growth in shale regions and increasing demand for natural-gas liquids. Duncan's earnings for the period rose 7.8 percent.

Enterprise units closed on Feb. 22 at $43.70, while Duncan finished at $32.56, compared with the $41.71 offer price. Then came the offer after the close of the market. On Feb .23, DEP closed at $39.57 a unit, up $7.01. EPD closed on Feb. 23 at $42.97, down $0.73.

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