Pipeline company Oneok Partners LP's (NYSE: OKS) biggest shareholder, Oneok Inc. (NYSE: OKE), said Feb. 1 it would buy the rest of the company for $9.3 billion.
The acquisition is the latest MLP deal aimed at simplifying structures and increasing returns. Oneok said the deal would result in a dividend increase of 21% to 74.5 cents per share, or $2.98 annually.
Oneok said it would pay 0.985 shares for each Oneok Partners unit it does not already own.
Based on both the stocks' closing price on Jan. 31, that works out to $54.28 per share, representing a premium of 26% for shareholders of Oneok Partners.
Oneok Partners' units, which will not be publicly traded after the deal closes in the second quarter, were at $54.15 in premarket trade. Oneok's shares were up 1.9% at $56.15.
Oneok said it would issue 168.9 million shares for the deal, representing about 44.5% of the total outstanding shares of the combined company, on a pro forma basis.
The company will have an integrated 37,000-mile network of NGL, pipelines and processing plants in the Williston Basin, U.S. Midcontinent, Permian Basin, Midwest and Gulf Coast.
J.P. Morgan Securities LLC is acting as Oneok's lead financial adviser and Skadden Arps, Slate, Meagher & Flom LLP will provide legal advice.
Barclays is financial adviser to Oneok Partners' conflicts committee and Andrews Kurth Kenyon LLP is its legal adviser.
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