SemGroup® Corporation (NYSE: SEMG) today announced it has entered
into a definitive merger agreement whereby SemGroup will be
acquired by Energy Transfer LP (NYSE: ET) (“ET” or “Energy
Transfer”) in a unit and cash transaction valued at approximately
$5.1 billion, including the assumption of debt and other
liabilities.
Under the terms of the agreement, which has been
unanimously approved by the Boards of Directors of both companies,
SemGroup shareholders will receive $6.80 per share in cash and
0.7275 of an ET common unit for each SemGroup share, or
approximately 40% cash and 60% equity. The equity consideration
received is expected to be treated as a tax-free transaction. The
transaction values SemGroup at $17.00 per share, and represents a
65% premium to SemGroup’s closing share price of $10.28 on
September 13, 2019, and an 87% premium to SemGroup’s 20 day volume
weighted average price (VWAP) as of the same date. Upon closing,
SemGroup shareholders are expected to own approximately 2.2% of
ET’s outstanding common units.
SemGroup Chief Executive Officer, Carlin Conner,
said, “This strategically and financially compelling combination
will result in SemGroup joining one of the largest midstream energy
companies in the country, with a strong footprint in all major U.S.
production basins. The combined entity’s size, scale and financial
profile will ensure that SemGroup’s assets, including our Gulf
Coast terminal, mid-continent footprint and our Canadian joint
venture SemCAMS Midstream, benefit from significant growth well
into the future. We look forward to leveraging the increased
pipeline connectivity and expanded terminalling infrastructure that
the combined entity provides.”
Conner continued, “SemGroup has been exploring a
range of strategic alternatives aimed at increasing shareholder
value, and determined that this combination with ET is in the best
interests of shareholders -- providing immediate value, a
significant premium, and opportunity to participate in the future
upside of the combined business. Our transaction with ET
underscores the strength of SemGroup’s assets, and is a testament
to our employees’ dedication, hard work and focus on providing
safe, efficient and reliable service while creating an asset
portfolio that is highly desired.”
The transaction is expected to close by late 2019
or early 2020, subject to obtaining regulatory approvals, SemGroup
shareholder approval and other customary closing
conditions.
AdvisorsJefferies LLC acted as
exclusive financial advisor to SemGroup and Kirkland & Ellis
LLP acted as legal counsel. BofA Merrill Lynch acted as exclusive
financial advisor to Energy Transfer and Latham & Watkins LLP
acted as legal counsel.
About SemGroupSemGroup®
Corporation (NYSE: SEMG) moves energy across North America through
a network of pipelines, processing plants, refinery-connected
storage facilities and deep-water marine terminals with import and
export capabilities. SemGroup serves as a versatile connection
between upstream oil and gas producers and downstream refiners and
end users. Key areas of operation and growth include western
Canada, the Mid-Continent and the Gulf Coast. SemGroup is committed
to safe, environmentally sound operations. Headquartered in Tulsa,
Okla., the company has additional offices in Calgary, Alberta;
Denver, Colo.; and Houston, Texas. SemGroup uses its Investor
Relations website and social media outlets as channels of
distribution of material company information. Such information is
routinely posted and accessible on SemGroup’s Investor Relations
website at www.semgroup.com, SemGroup’s Twitter account and
LinkedIn account.
Forward-Looking Statements This
press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. These statements
generally can be identified by the fact that they do not relate
strictly to historical or current facts. Statements preceded by,
followed by or that otherwise include the words “believes,”
“expects,” “anticipates,” “intends,” “projects,” “estimates,”
“plans,” “may increase,” “may fluctuate,” “will,” “should,”
“would,” “may” and “could” or similar words or expressions are
generally intended to identify forward-looking statements. Specific
forward-looking statements include statements regarding the
Company’s plans and expectations with respect to the proposed
transaction and the anticipated impact of the proposed transaction
on the Company’s results of operations, financial position, growth
opportunities and competitive position. These statements reflect
the Company’s current views with respect to future events based on
management’s experience and perception of historical trends,
current conditions, anticipated future developments and other
factors believed to be appropriate. No assurances can be given,
however, as of this date that these events will occur or that these
projections will be achieved. Forward-looking statements involve
known and unknown risks, uncertainties and other factors that are
difficult to predict and could cause actual results to be
materially different from those expressed in or implied by such
forward-looking statements. Some of these factors include the
Company’s ability to consummate the proposed transaction on the
expected timeframe or at all, including due to the inability to
obtain all approvals necessary or the failure of other closing
conditions; the volatility of oil and natural gas prices; any
sustained reduction in demand for, or supply of, the petroleum
products we gather, transport, process, market and store; the
overall forward markets for crude oil, natural gas and natural gas
liquids; operational, regulatory and environment risks; cost and
availability of equipment and labor; the Company’s ability to
finance its activities; and other risks more fully discussed in the
Company’s filings with the Securities and Exchange Commission (the
“SEC”), including its Annual Reports on Form 10-K and Quarterly
Reports on Form 10-Q, available on the Company’s website or the
SEC’s website at www.sec.gov. Any forward-looking statement speaks
only as of the date of which such statement is made and the Company
undertakes no obligation to correct or update any forward-looking
statement, whether as a result of new information, future events or
otherwise, except as required by applicable law.
Important Additional Information
Regarding the Transaction Will Be Filed With the SECIn
connection with the proposed transaction, Energy Transfer will file
a registration on Form S-4 that will include a proxy statement of
the Company. The definitive proxy statement will be sent to the
stockholders of the Company. The Company and Energy Transfer may
also file other documents with the SEC regarding the proposed
transaction. INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE
ADVISED TO CAREFULLY READ THE PROXY STATEMENT AND ANY REGISTRATION
STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS
THERETO) WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE TRANSACTION, THE PARTIES TO THE
TRANSACTION AND THE RISKS ASSOCIATED WITH THE TRANSACTION. A
definitive proxy statement and any registration
statement/prospectus, as applicable, will be sent to security
holders of the Company in connection with the Company’s shareholder
meetings. Investors and security holders may obtain a free copy of
the proxy statement (when available), any registration
statement/prospectus and other relevant documents filed by the
Company with the SEC from the SEC’s website at www.sec.gov.
Security holders and other interested parties will also be able to
obtain, without charge, a copy of the proxy statement (when
available), any registration statement/prospectus and other
relevant documents by directing a request by mail or telephone to
Investor Relations, SemGroup Corporation, 6120 S. Yale Ave, Suite
1500, Tulsa, OK 74136-4231. Copies of the documents filed by the
Company with the SEC will be available free of charge on the
Company’s website at ir.semgroup.com.
Participants in the
SolicitationThe Company and its directors, executive
officers and certain other members of management may be deemed to
be participants in the solicitation of proxies from its security
holders with respect to the transaction. Information about these
persons is set forth in the Company’s definitive proxy statement
relating to its 2019 Annual Meeting of Stockholders, as filed with
the SEC on April 12, 2019, and subsequent statements of changes in
beneficial ownership on file with the SEC. Security holders and
investors may obtain additional information regarding the interests
of such persons, which may be different than those of the Company’s
security holders generally, by reading the proxy statement, any
registration statement and other relevant documents regarding the
transaction, which will be filed with the SEC.
No Offer or SolicitationThis
document is not intended to and does not constitute an offer to
sell or the solicitation of an offer to subscribe for or buy or an
invitation to purchase or subscribe for any securities or the
solicitation of any vote in any jurisdiction pursuant to the
proposed transaction or otherwise, nor shall there be any sale,
issuance or transfer of securities in any jurisdiction in
contravention of applicable law. Subject to certain exceptions to
be approved by the relevant regulators or certain facts to be
ascertained, the public offer will not be made directly or
indirectly, in or into any jurisdiction where to do so would
constitute a violation of the laws of such jurisdiction, or by use
of the mails or by any means or instrumentality (including, without
limitation, facsimile transmission, telephone and the internet) of
interstate or foreign commerce, or any facility of a national
securities exchange, of any such jurisdiction.
SemGroup Investor Relations:Kevin
Greenwell918-524-8081investor.relations@semgroup.com
SemGroup Media:Tom
Droege918-524-8560tdroege@semgroup.com
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