Energy Transfer Equity and Energy Transfer Partners Execute Another Step in Their Strategic Plan
Exchange of 21 million ETP common units owned by ETE for 100% of SUN GP interest and IDRs
Additional two-year IDR subsidy from ETE to ETP
Transaction is highly cash flow accretive to ETP
ETE benefits from SUN growth and future IDR subsidy reduction with no impact on its current or future distributions
The cash flow accretion expected to be realized by ETP from this
transaction is more than
For ETE, this transaction continues its transition to a pure play
general partner for the overall
In connection with the original acquisition of
Transaction Rationale:
For ETP:
- Reduces ETP’s common unit count by almost 5% and has a commensurate reduction to the amount of distributions to be paid to ETE with respect to the ETP IDRs;
- Solidifies current distribution increases while continuing to strengthen its distribution coverage ratio;
- The IDR subsidy for two years provides additional near term cash flow benefits;
- Crystallizes tremendous value maximization from the overall Susser transaction in less than 12 months; and
- Together with ETP’s focus on its organic growth projects, this transaction should be a positive catalyst for ETP’s unit price and help improve its current cost of capital.
For ETE:
-
Reinforces ETE’s strategy to become a traditional GP within the
Energy Transfer family; - Increases in value of the underlying SUN GP creates incremental upside to ETE;
- Direct benefit from expected dynamic drop down and third party growth at SUN; and
- Continued upside from ETP IDRs as ETP accelerates its future distribution growth.
ETP and ETE expect there will be no credit ratings impact from this transaction. Following this transaction, SUN will no longer be consolidated for accounting purposes by ETP, but instead will appear in the consolidated financial statements for ETE.
This transaction is expected to close in
Forward-Looking Statements
This press release may include certain statements concerning
expectations for the future that are forward-looking statements as
defined by federal law. Such forward-looking statements are subject to a
variety of known and unknown risks, uncertainties, and other factors
that are difficult to predict and many of which are beyond management’s
control. Among those is the risk that the anticipated benefits from the
proposed transaction cannot be fully realized. An extensive list of
factors that can affect future results are discussed in the
Partnerships’ Annual Reports on Form 10-K and other documents filed from
time to time with the
The information contained in this press release is available on ETP’s and ETE’s website at www.energytransfer.com.
Legend Related to
Forward-looking Statements
This communication may contain forward-looking statements. These
forward-looking statements include, but are not limited to, statements
regarding ETE’s offer to acquire The Williams Companies, Inc.
(“Williams”), its expected future performance (including expected
results of operations and financial guidance), and the combined
company's future financial condition, operating results, strategy and
plans. Forward-looking statements may be identified by the use of the
words "anticipates," "expects," "intends," "plans," "should," "could,"
"would," "may," "will," "believes," "estimates," "potential," "target,"
"opportunity," "designed," "create," "predict," "project," "seek,"
"ongoing," "increases" or "continue" and variations or similar
expressions. These statements are based upon the current expectations
and beliefs of management and are subject to numerous assumptions, risks
and uncertainties that change over time and could cause actual results
to differ materially from those described in the forward-looking
statements. These assumptions, risks and uncertainties include, but are
not limited to, assumptions, risks and uncertainties discussed in the
most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q
for each of ETE, ETP,
Additional Information
This communication does not constitute an offer to buy or solicitation of an offer to sell any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended. This communication relates to a proposal which ETE has made for a business combination transaction with Williams. In furtherance of this proposal and subject to future developments, ETE and ETE Corp. (and, if a negotiated transaction is agreed, Williams) may file one or more registration statements, proxy statements or other documents with the SEC. This communication is not a substitute for any proxy statement, registration statement, prospectus or other document ETE, ETE Corp. or Williams may file with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF ETE AND WILLIAMS ARE URGED TO READ THE PROXY STATEMENT(S), REGISTRATION STATEMENT, PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED BUSINESS COMBINATION TRANSACTION. Any definitive proxy statement(s) (if and when available) will be mailed to stockholders of Williams. Investors and security holders will be able to obtain free copies of these documents (if and when available) and other documents filed with the SEC by ETE through the web site maintained by the SEC at http://www.sec.gov. Copies of the documents filed by ETE and ETE Corp. with the SEC will be available free of charge on ETE’s website at www.energytransfer.com or by contacting Investor Relations at 214-981-0700.
ETE and its directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding the directors and officers of ETE’s general partner is contained in ETE’s Annual Report on Form 10-K filed with the SEC on March 2, 2015 (as it may be amended from time to time). Additional information regarding the interests of such potential participants will be included in the proxy statement/prospectus and other relevant documents filed with the SEC if and when they become available. Investors should read the proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from ETE using the sources indicated above.
ETE Exchange Offer
This communication is not a substitute for any registration statement, prospectus or other document ETE and ETE Corp. may file with the SEC in connection with any offer to ETE unitholders to exchange their ETE common units for common shares in ETE Corp. In connection with any offer to ETE unitholders to exchange their ETE common units for common shares in ETE Corp., ETE and ETE Corp. may file a registration statement and other documents with the SEC. INVESTORS AND SECURITY HOLDERS OF ETE ARE URGED TO READ THE REGISTRATION STATEMENT AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED OFFER TO EXCHANGE. Investors and security holders may obtain free copies of these documents if any when they become available from ETE using the sources indicated above.
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Source:
Investor Relations:
Energy Transfer
Brent Ratliff, 214-981-0795
or
Lyndsay
Hannah, 214-840-5477
or
Innisfree M&A Incorporated
Arthur
Crozier / Jennifer Shotwell / Scott Winter
212-750-5833
or
Media
Relations:
Granado Communications Group
Vicki Granado,
214-599-8785
Cell: 214-498-9272
or
Brunswick Group
Steve
Lipin, 212-333-3810
or
Mark Palmer, 214-254-3790