Calgary, Alberta-based TransCanada Corp. (TRP - Free Report) announced that it has offered $848 million to buy Columbia Pipeline Partners LP (CPPL), the master limited partnership affiliate of its newly acquired Columbia Pipeline Group Inc. unit.
The Canadian oil company also announced its intention to take control of the other 53.8 million outstanding units in Columbia Pipeline Partners for $15.75 per common unit. The offer signifies a premium of about 3% over the limited partnership closing price of $15.30 on Sep 23, 2016.
Per TransCanada, a committee of independent directors of Columbia Pipeline Partners will be formed to appraise the offer.
In July, TransCanada purchased the Columbia Pipeline Group Inc. unit for $13 billion, which included debt of $2.8 billion. The Canadian pipeline operator has been reviewing its strategic options for its master limited partnership holdings ever since.
TC PipeLines LP is a limited partnership is owned by TransCanada. The partnership has interests in a number of U.S. natural-gas pipelines including the Bison pipeline, which runs between Wyoming and North Dakota.
If the aforesaid buyout proceeds as expected, it would strengthen TransCanada’s control on a pipeline network that stretches from New York to the Gulf of Mexico. The purchase would also include natural gas storage systems and a portfolio of gathering and processing assets in the same stretch.
The proposed transaction is subject to certain conditions, including compliance with the U.S. antitrust law and approval from the majority of CPPL unitholders.
TransCanada currently carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector are Enbridge Inc. (ENB - Free Report) , NGL Energy Partners LP (NGL - Free Report) and Total SA (TOT - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Enbridge posted a positive earnings surprise of 19.57% in the preceding quarter.
NGL Energy Partners has a mixed earnings surprise history. The partnership posted positive earnings surprise in two of the last four quarters. It reported a positive earnings surprise of 1480.0% in the preceding quarter.
In the last reported quarter, Total SA delivered a positive earnings surprise of 20.00%. Coming to the earnings surprise history, Total beat estimates in all of the last four quarters.
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