Tallgrass Energy Partners Unitholders Overwhelmingly Approve Merger with Tallgrass Energy GP; Closing Expected on June 29, 2018
June 26 2018 - 11:50AM
Business Wire
Tallgrass Energy Partners, LP (NYSE: TEP) (“TEP”) and Tallgrass
Energy GP, LP (NYSE: TEGP) (“TEGP”) announced that at a special
meeting today, TEP unitholders overwhelmingly approved the
stock-for-unit merger transaction in which TEGP will acquire the
approximately 47.6 million TEP common units held by the public at a
ratio of 2.0 TEGP Class A shares for each outstanding TEP common
unit. Approximately 85 percent of the outstanding TEP common units
were voted and, of that amount, greater than 99 percent voted in
favor of the merger.
“Today’s vote validates our decision to merge TEGP and TEP,”
said President and CEO David G. Dehaemers Jr. “Overwhelming
unitholder support confirms our belief that this was a creative and
uniformly positive transaction resulting in favorable economics for
equity holders of both securities. With a streamlined corporate
structure, lower cost of capital, broader investor appeal, strong
balance sheet and healthy dividend coverage, Tallgrass Energy is
well-positioned to continue its path as one of the nation’s leading
pipeline owner/operators.”
The merger transaction is expected to close on June 29, 2018 and
be effective as of June 30, 2018. Upon completion of the
transaction, TEGP will change its name to Tallgrass Energy, LP.
Beginning July 2, 2018, TEGP’s Class A shares will trade on the
NYSE under the ticker symbol “TGE” and TEP’s common units will no
longer be publicly traded.
Merger Transaction
Overview
- Under the terms of the Agreement and
Plan of Merger, TEGP will acquire the approximately 47.6 million
TEP common units held by the public at a fixed exchange ratio of
2.0 TEGP Class A shares for each outstanding common unit
- Incentive Distribution Rights will be
eliminated, reducing TGE’s equity cost of capital and enhancing the
accretion from growth projects and M&A transactions
- Single public entity reduces complexity
for investors, further aligns interests of all Tallgrass Energy
equity holders and streamlines governance
- TGE will be taxed as a C-Corp (1099
issuing entity), providing increased equity market depth
- No cash federal income taxes expected
at TGE for a period currently estimated to be at least 10
years
About Tallgrass Energy
Tallgrass Energy is a family of companies that includes publicly
traded partnerships Tallgrass Energy Partners, LP (NYSE: TEP) and
Tallgrass Energy GP, LP (NYSE: TEGP). Operating across 11 states,
Tallgrass is a growth-oriented midstream energy operator with
transportation, storage, terminal, water, gathering and processing
assets that serve some of the nation’s most prolific crude oil and
natural gas basins.
To learn more, please visit our website
at www.tallgrassenergy.com.
Additional Information and Where to
Find it
In connection with the transactions referred to in this
material, TEGP filed a registration statement on
Form S-4 with the Securities and Exchange Commission
(“SEC”) that includes a preliminary proxy statement for the TEP
unitholders. The registration statement was declared effective by
the SEC on May 9, 2018, and TEP commenced mailing the definitive
proxy statement/prospectus to its unitholders on or about May 23,
2018. This material is not a substitute for the proxy
statement/prospectus or registration statement or for any other
document that TEGP or TEP may file with the SEC in connection with
the proposed transactions. On June 26, 2018, TEP’s unitholders
approved the Agreement and Plan of Merger and the transactions
contemplated thereby at a special meeting.
INVESTORS AND SECURITY HOLDERS OF TEGP AND TEP ARE URGED TO READ
THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE
SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE
BECAUSE THEY CONTAIN IMPORTANT INFORMATION.
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval.
Investors and security holders are able to obtain free copies of
the proxy statement/prospectus and will be able to obtain free
copies of other documents filed with the SEC by TEGP or TEP through
the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed
with the SEC by TEGP and TEP will be available free of charge on
TEGP’s and TEP’s website at www.tallgrassenergylp.com, in the “Investor
Relations” tab near the top of the page, or by contacting TEGP’s
and TEP’s Investor Relations Department at 913-928-6012.
Participants in the
Solicitation
TEGP and TEP and their respective general partner’s directors
and executive officers may be considered participants in the
solicitation of proxies with respect to the proposed transactions
under the rules of the SEC. Information about the directors and
executive officers of TEGP’s general partner may be found in its
2017 Form 10-K filed with the SEC on Feb. 13, 2018, and
any subsequent statements of changes in beneficial ownership filed
with the SEC. Information about the directors and executive
officers of TEP may be found in its 2017 Form 10-K filed
with the SEC on Feb. 13, 2018, and any subsequent statements of
changes in beneficial ownership filed with the SEC. These documents
can be obtained free of charge from the sources indicated above.
Additional information regarding the participants in the proxy
solicitations and a description of their direct and indirect
interests, by security holdings or otherwise, will also be included
in any proxy statement and other relevant materials to be filed
with the SEC when they become available.
Cautionary Note Concerning
Forward-Looking Statements
Disclosures in this press release contain forward-looking
statements. All statements, other than statements of historical
facts, included in this press release that address activities,
events or developments that management expects, believes or
anticipates will or may occur in the future are forward-looking
statements. Without limiting the generality of the foregoing,
forward-looking statements contained in this press release
specifically include whether the merger transaction between TEP and
TEGP will be closed on June 29, 2018, or at all, the expected
effective date of the merger transaction, the expected name change
of TEGP and the public trading changes of TEGP and TEP upon
completion of the transaction, statements regarding the expected
benefits of the proposed transaction, and that TGE does not expect
to pay cash federal income taxes for a period of at least 10 years.
Such statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of TEP and
TEGP, which may cause actual results to differ materially from
those implied or expressed by the forward-looking statements, and
other important factors that could cause actual results to differ
materially from those projected, including those set forth in
reports filed by TEP and TEGP with the SEC. Any forward-looking
statement applies only as of the date on which such statement is
made, and TEP and TEGP do not intend to correct or update any
forward-looking statement, whether as a result of new information,
future events or otherwise, except as required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20180626006187/en/
Tallgrass EnergyInvestor and Financial InquiriesNate
Lien, 913-928-6012investor.relations@tallgrassenergylp.comorMedia
and Trade InquiriesPhyllis Hammond,
303-763-3568phyllis.hammond@tallgrassenergylp.com
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