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Blackstone's infrastructure arm offers to buy out Tallgrass Energy

Tallgrass Energy LP received an offer from Blackstone Group Inc.'s infrastructure arm to take the energy midstream company private by acquiring its shares the private equity firm does not already own.

Blackstone Infrastructure Partners, its partners and affiliates offered to buy Tallgrass' outstanding class A shares for $19.50 per share, representing a 35.9% premium over Tallgrass' closing price on Aug. 27, according to a news release on the same day. At the offer price, the proposed deal would be valued at $3.03 billion.

The deal would be structured as a merger, under which an acquisition vehicle controlled by the Blackstone entities would merge into Tallgrass, with Tallgrass surviving the merger, according to the proposal.

The Blackstone entities currently hold a 44.2% economic interest in Tallgrass as of Aug. 27. Blackstone Infrastructure Partners in March closed a roughly $3.2 billion acquisition of a 44% interest in Tallgrass and full membership interest in its general partner.

Tallgrass' board plans to create a conflicts committee made up of independent board members to evaluate the offer, with the help of independent financial and legal advisers.