Cheniere Energy Inc. has ended talks to buy out the holding company that holds the majority stake in its master limited partnership after the companies were unable to agree to the terms of the acquisition.
Cheniere said in a Dec. 9 news release that after more than six months of negotiations, the company's board of directors and a conflicts committee established by Cheniere Energy Partners LP Holdings LLC's board failed to agree on an exchange ratio for the proposed stock-for-stock deal.
"Cheniere has determined that no acceptable definitive agreement can be reached with the conflicts committee at this time," the statement said.
Under the initial proposal, announced Sept. 30, Cheniere would issue 0.5049 share for each of outstanding share of Cheniere Holdings it does not already own, representing a value of $21.90 per share and a premium of about 3% over both entities' closing price as of Sept. 29.
Cheniere said that during negotiations it raised the offer to 0.54 share for each outstanding share of Cheniere Holdings, or about a 10% premium over both companies' closing price as of Sept. 29.
Cheniere owns 80.1% of Cheniere Holdings' shares. The proposed buyout would have made Cheniere Holdings a wholly owned subsidiary of Cheniere. Cheniere said in the statement that the company may still buy additional shares of Cheniere Holdings.
Cheniere Holdings owns a 55.9% limited partner interest in Cheniere Energy Partners LP, the MLP that owns the Sabine Pass LNG regasification facility and the connected Cheniere Creole Trail Pipeline Co. LP. Cheniere Energy Partners is also the developer of the Sabine Pass liquefaction and export project, which will include six liquefaction trains capable of producing roughly 3.5 Bcf/d of LNG.
Cheniere shares were up about 1.7% in pre-market trading as of 9 a.m. ET on Dec. 9, while Cheniere Holdings was up 3%.