Teekay Offshore Partners Announces Agreement for the Acquisition of Its Publicly Held Common Units by Brookfield
October 01 2019 - 6:59AM
Teekay Offshore Partners L.P. (Teekay Offshore or the Partnership)
(NYSE:TOO) today announced that it has entered into an agreement
and plan of merger (the Merger Agreement) with Brookfield Business
Partners L.P., and certain of its affiliates and institutional
partners (collectively, the Brookfield Consortium). Pursuant to the
Merger Agreement, the Brookfield Consortium will acquire by merger
all of the outstanding publicly held common units representing
limited partner interests of the Partnership (common units) not
already held by the Brookfield Consortium (unaffiliated
unitholders) in exchange for $1.55 in cash per common unit (the
cash consideration). The cash consideration represents an increase
of $0.34 (28.1 percent) per common unit when compared to the
closing price per common unit on May 16, 2019, immediately prior to
Brookfield’s initial offer and a premium of $0.39 (33.6 percent) to
the $1.16 closing price per common unit on September 30, 2019. As
an alternative to receiving the cash consideration, each
unaffiliated unitholder will have the option (the unit option) to
elect to receive one newly designated unlisted Class A Common Unit
of the Partnership (the equity consideration) per common unit. The
Class A Common Units will be economically equivalent to the common
units to be held by the Brookfield Consortium following the closing
of the merger, but will have limited voting rights and limited
transferability.
In connection with the merger, the Partnership
will deliver election materials to the unaffiliated unitholders
that will include a description of the terms of the Class A Common
Units and instructions for electing to receive the equity
consideration. Unitholders who do not elect to receive the equity
consideration prior to the election date set forth in the election
materials will receive the cash consideration. Pursuant to the
terms of the Merger Agreement, the Partnership’s outstanding
preferred units will be unchanged and remain outstanding by virtue
of the merger.
The conflicts committee, composed of
non-executive, independent directors (the Conflicts Committee), of
the board of directors of the Partnership’s general partner (the
Board), after consultation with its independent legal and financial
advisors, unanimously approved the Merger Agreement and determined
that the transaction contemplated thereby was advisable and in the
best interests of the Partnership and the unaffiliated unitholders.
Subsequently, on the recommendation of the Conflicts Committee, the
members of the Board unanimously approved the Merger Agreement and
the transactions contemplated thereby.
The Brookfield Consortium, the Conflicts
Committee and the Board agreed to include the unit option in the
Merger Agreement, however, neither the Conflicts Committee nor the
Board are making any recommendation whether an unaffiliated
unitholder should elect the unit option nor did they evaluate the
terms of the equity consideration in determining whether to approve
the Merger Consideration.
The merger is expected to close in the fourth
quarter of 2019 and is subject to satisfaction of certain customary
conditions. Upon the closing of the merger, the common units will
cease to be publicly traded. The Partnership will continue to file
certain reports with the Securities and Exchange Commission (the
SEC) following the closing of the merger.
Evercore Group L.L.C. acted as financial advisor
and Potter Anderson & Corroon LLP acted as legal counsel to the
Conflicts Committee.
About Teekay Offshore
Teekay Offshore Partners L.P. is a leading
international midstream services provider to the offshore oil
production industry, primarily focused on the ownership and
operation of critical infrastructure assets in offshore oil regions
of the North Sea, Brazil and the East Coast of Canada. Teekay
Offshore has consolidated assets of approximately $5.2 billion,
comprised of 58 offshore assets, including floating production,
storage and offloading units, shuttle tankers (including seven new
buildings), floating storage and offtake units, long-distance
towing and offshore installation vessels, and a unit for
maintenance and safety. The majority of Teekay Offshore’s fleet is
employed on medium-term, stable contracts.
Teekay Offshore’s common units and preferred
units trade on the New York Stock Exchange under the symbols “TOO”,
“TOO PR A”, “TOO PR B” and “TOO PR E”, respectively.
Forward-Looking Statements
This press release includes statements that may
constitute forward-looking statements made pursuant to the safe
harbor provision of the Private Securities Litigation Reform Act of
1995. Although the Partnership believes that the expectations
reflected in such forward-looking statements are based on
reasonable assumptions, such statements are subject to risks and
uncertainties that could cause actual results to differ materially
from those projected. Further, the Partnership’s and Brookfield’s
ability to consummate the proposed merger may be influenced by many
factors that are difficult to predict, involve uncertainties that
may materially affect actual results and that are often beyond the
control of the Partnership. These factors include, but are not
limited to, failure of closing conditions, and delays in the
consummation of the proposed transaction, as circumstances warrant.
Important factors that could cause actual results to differ
materially from the Partnership’s expectations and may adversely
affect the Partnership’s business and results of operations are
disclosed in Item 3 of the Partnership’s Annual Report on Form 20-F
for the year ended December 31, 2018, filed with the SEC on
February 28, 2019, as updated and supplemented by subsequent
filings with the SEC. The forward-looking statements speak only as
of the date made, and, other than as may be required by law, the
Partnership undertakes no obligation to update or revise any
forward looking statements, whether as a result of new information,
future events or otherwise.
For Investor Relations enquiries
contact:
Jan Rune Steinsland Tel: +47 97052533
Website: www.teekayoffshore.com
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