As a part of its “Just Vote No” Campaign against the merger between ONEOK, Inc. and Magellan Midstream Partners, Energy Income Partners (EIP) has launched www.votemmp.com, a website in protest of the merger. (Source: "Just Vote No"/Energy Income Partners)
As a part of its “Just Vote No” Campaign against the merger between ONEOK, Inc. and Magellan Midstream Partners, Energy Income Partners (EIP) has launched www.votemmp.com, a website in protest of the merger.
EIP, the fourth largest shareholder in Magellan Midstream Partners, remains steadfast in its stance against the proposed merger.
In a press release EIP said, "This isn't a merger that will create a better company; it's trading the excellence of a top-tier company for a mediocre one.”
EIP cites concerns surrounding industrial logic and failure to explore strategic alternatives as issues they have with the merger.
EIP also feels that the deal generates trivial synergies that are more than offset by additional interest charges related to the debt to consummate the deal. Financial projections in the S-4 also show the annualized return on ONEOK's new growth capital invested is just 5%, or that the base business EBITDA is declining. These factors negate arguments that the combined company offers either diversification or a better future than a stand-alone Magellan.
EIP called the merger a “clear case of 'diworsification',” or adding assets to a portfolio simply for the sake of diversification without considering whether those assets will actually benefit the overall investment strategy.
Recommended Reading
Kinder Morgan Reaches FID for $1.4B Mississippi NatGas Pipeline
2024-12-19 - Kinder Morgan plans to keep boosting its capacity to the Southeast and is moving forward with a 206-mile pipeline with an initial capacity of 1.5 Bcf/d.
Analysts: NatGas Price Will Drive Next Appalachian Pipeline
2024-11-13 - Infrastructure development in the Appalachia region could also benefit from greater legislative certainty.
EQT, Blackstone Credit Enter $3.5 Billion Midstream Joint Venture
2024-11-25 - Blackstone Credit & Insurance entered a joint venture with EQT Corp. to take a non-controlling interest in the Mountain Valley Pipeline and other infrastructure from the Equitrans transactions for $3.5 billion.
Private Midstream Executives: More M&A, More Demand, More Gas Pricing Woes
2024-10-17 - Private midstream CEOs discuss the growth, opportunities and challenges that lie ahead.
Energy Transfer Shows Confidence in NatGas Demand with Pipeline FID
2024-12-11 - Analyst: Energy Transfer’s recent decision to green light the $2.7 billion Hugh Brinson line to Dallas/Fort Worth suggests electric power customers are lining up for Permian Basin gas.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.