ONEOK will purchase Magellan Midstream Partners in a cash-and-stock offer valued at $18.8 billion, producing a combined U.S. oil and gas pipeline giant with an overall business worth of $60 billion, the 2 significant pipeline operators stated on Sunday.
Under a merger contract, mainly gas-focused ONEOK will purchase all impressive systems of Magellan for $25.00 in money and 0.6670 shares of ONEOK typical stock for each impressive Magellan typical system. This would represent a present indicated worth to each Magellan unitholder of $67.50 per system, for a 22% premium, based upon May 12, 2023 closing rates.
The deal, anticipated to close in the 3rd quarter of 2023, has actually been all authorized by the board of directors of both business. The closing of the deal goes through traditional closing conditions, consisting of the approvals of both ONEOK investors and Magellan unitholders, along with Hart Scott Rodino Act clearance.
ONEOK stated it had actually protected $5.25 billion in completely devoted bridge funding for the proposed money factor to consider.
With the acquisition of Magellan, ONEOK includes a mainly fee-based, refined items and petroleum transport organization.
” This acquisition develops a more durable energy facilities business that is anticipated to produce steady money streams through varied product cycles,” ONEOK stated in the declaration.
The offer is anticipated to raise the incomes per share (EPS) start in 2024 with EPS boost of 3% to 7% each year from 2025 through 2027.
The combined business will own more than 25,000 miles of liquids-oriented pipelines, with substantial possessions and functional competence at the Gulf Coast and Mid-Continent market centers.
” We are fans of debt consolidation in midstream,” Raymond James experts composed in a note to customers discussing the offer, as brought by Bloomberg
” We see this as a strong relocate to reroute the long-lasting method of both business, moving the pro forma entity closer to the top of the class from a scale and diversity point of view,” the experts stated.
By Tsvetana Paraskova for Oilprice.com
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