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Energy Transfer Partners to Buy the Remaining PennTex Units
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Dallas-based pipeline operator Energy Transfer Partners, L.P. is set to acquire the outstanding units of its Houston-based subsidiary, PennTex Midstream Partners, LP .
Energy Transfer Partners launched a tender offering of $20 per unit in cash to purchase the remaining units of PennTex on May 18. The total transaction value is estimated at $280.25 million and the offering is scheduled to expire on Jun 19. Post the launch of the tender offer, units of PennTex rose by almost 20% to close at $19.88 on May 19.
Energy Transfer Partners currently owns 32.4% of common units of PennTex and needs another 47.6 % to increase its ownership to 80%. This will enable Energy Transfer Partners to exercise its call option for the remaining 20%. After the partnership exercises its right, PennTex’s remaining unit holders will receive at least the same cash price per common unit as paid in the tender offer.
Last year in October, Energy Transfer Partners inked a $640 million deal to acquire stakes in PennTex. Per the deal, Energy Transfer Partners acquired 100% stake of PennTex’s general partner and 20 million subordinated units along with 6.3 million common units of PennTex. With the recent tender offering, Energy Transfer Partners will buy out the remaining minority investors to consolidate its holding.
Acquisition of PennTex interests by Energy Transfer Partners is a prudent move. Since Energy Transfer Partner’s existing midstream footprint is complementary to PennTex midstream assets, it is likely to create additional opportunities for the partnership and boost growth and value.
Zacks Rank and Key Pick
Energy Transfer Partners is a master limited partnership engaged in the intrastate transportation and storage business of natural gas in the U.S. Energy Transfer Equity, L.P. is the partnership’s general partner and a 100% incentive distribution right in the partnership.
Over the last six months, the Zacks categorized Oil and Gas Production Pipeline-MLP industry has registered 2.5% growth. However, units of Energy Transfer Partners have underperformed the industry by declining 4.1%.
The partnership currently carries a Zacks Rank #4 (Sell).
Delek Logistics is expected to register year-over-year growth of 26.04% and 16.10% in its earnings in 2017 and 2018 respectively.
Zacks' 2017 IPO Watch List
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Energy Transfer Partners to Buy the Remaining PennTex Units
Dallas-based pipeline operator Energy Transfer Partners, L.P. is set to acquire the outstanding units of its Houston-based subsidiary, PennTex Midstream Partners, LP .
Energy Transfer Partners launched a tender offering of $20 per unit in cash to purchase the remaining units of PennTex on May 18. The total transaction value is estimated at $280.25 million and the offering is scheduled to expire on Jun 19. Post the launch of the tender offer, units of PennTex rose by almost 20% to close at $19.88 on May 19.
Energy Transfer Partners currently owns 32.4% of common units of PennTex and needs another 47.6 % to increase its ownership to 80%. This will enable Energy Transfer Partners to exercise its call option for the remaining 20%. After the partnership exercises its right, PennTex’s remaining unit holders will receive at least the same cash price per common unit as paid in the tender offer.
Last year in October, Energy Transfer Partners inked a $640 million deal to acquire stakes in PennTex. Per the deal, Energy Transfer Partners acquired 100% stake of PennTex’s general partner and 20 million subordinated units along with 6.3 million common units of PennTex. With the recent tender offering, Energy Transfer Partners will buy out the remaining minority investors to consolidate its holding.
Acquisition of PennTex interests by Energy Transfer Partners is a prudent move. Since Energy Transfer Partner’s existing midstream footprint is complementary to PennTex midstream assets, it is likely to create additional opportunities for the partnership and boost growth and value.
Zacks Rank and Key Pick
Energy Transfer Partners is a master limited partnership engaged in the intrastate transportation and storage business of natural gas in the U.S. Energy Transfer Equity, L.P. is the partnership’s general partner and a 100% incentive distribution right in the partnership.
Over the last six months, the Zacks categorized Oil and Gas Production Pipeline-MLP industry has registered 2.5% growth. However, units of Energy Transfer Partners have underperformed the industry by declining 4.1%.
The partnership currently carries a Zacks Rank #4 (Sell).
Delek Logistics Partners, L.P. (DKL - Free Report) is one of the better- ranked stocks in the same industry carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Delek Logistics is expected to register year-over-year growth of 26.04% and 16.10% in its earnings in 2017 and 2018 respectively.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>