trending Market Intelligence /marketintelligence/en/news-insights/trending/bjzuqfet1vod6zwjb_xr9q2 content
Log in to other products

Login to Market Intelligence Platform


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

Tallgrass entities to simplify structure through stock-for-unit merger deal

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August

Tallgrass entities to simplify structure through stock-for-unit merger deal

Tallgrass Energy Partners LP and Tallgrass Energy GP LP struck a stock-for-unit merger agreement that would result in the cancellation of Tallgrass Energy Partners' incentive distribution rights, or IDRs, and the removal of its common units from public trading.

Under the deal, Tallgrass GP would acquire approximately 47.6 million publicly held Tallgrass Energy Partners common units at a fixed exchange ratio of 2.0 Tallgrass GP class A shares for each common unit, according to a March 26 news release. The ratio represents a premium of about 10% to the 30-day trading volume weighted average exchange ratio before the entities announced its evaluation of simplification deals on Feb. 7.

In return, Tallgrass GP would issue about 95.2 million class A shares to Tallgrass Energy Partners unit holders, or roughly 62.1% of its outstanding class A shares.

Upon deal closing, Tallgrass GP subsidiary Tallgrass Equity LLC would own 100% of Tallgrass Energy Partners' equity interests. Tallgrass Energy Partners' and Tallgrass Equity's revolving credit facilities, as well as Tallgrass Energy Partners' senior notes, would remain outstanding. The combined company would also be taxed as a corporation.

By eliminating Tallgrass Energy Partners' IDRs, the Tallgrass family of companies expect to improve their cost of capital, streamline their public entity and "enhance our ability to compete for, and the returns generated by, acquisitions and organic growth projects," said David Dehaemers Jr., president and CEO.

The deal is scheduled to close by the end of the second quarter of 2018, subject to approval from holders of a majority of outstanding Tallgrass Energy Partners common units and other customary closing conditions. Tallgrass GP and some of its subsidiaries also agreed to vote the 25.6 million Tallgrass Energy Partners common units they hold in favor of the merger.

Barclays acted as adviser to Tallgrass GP, while Evercore Partners served as adviser to Tallgrass Energy Partners' conflicts committee. Baker Botts LLP was Tallgrass GP's legal counsel and Bracewell LLP acted as legal counsel to Tallgrass Energy Partners' conflicts committee.

Separately, Tallgrass GP increased its quarterly cash dividend to 48.75 cents per class A share, or $1.95 annualized, for the first quarter. The dividend represents a 32.7% increase over the dividend in the the fourth quarter of 2017 and a 69.6% increase over the dividend in the first quarter of 2017.

Tallgrass Energy Partners also raised its quarterly cash distribution to 97.5 cents per common unit, or $3.90 annualized, for the first quarter. The distribution represents a 1.0% increase over the fourth-quarter 2017 distribution and a 16.8% increase over the the prior-year quarter's distribution.

The dividend and distribution will be paid on May 15 to shareholders and unit holders of record as of the close of business April 30.