PAA Natural Gas Storage Gets Takeover Proposal from Plains All American Pipeline

PAA Natural Gas Storage Gets Takeover Proposal from Plains All American Pipeline

PAA Natural Gas Storage announced that the independent directors of the board of directors of PNG’s general partner received a proposal from Plains All American Pipeline, L.P., whereby PAA would acquire all of PNG’s outstanding publicly held common units through a unit-for-unit exchange.

PAA is proposing a consideration of 0.435 common units of PAA for each issued and outstanding publicly held PNG common unit in a transaction that would be structured as a merger of PNG with a wholly owned subsidiary of PAA. The proposed consideration represents a value per PNG common unit of $22.74 based on the trailing 10-day average closing price of PAA’s common units through August 26, 2013.

PAA’s proposal assumes a regular quarterly distribution by PNG in November equal to the common unit distribution paid by PNG in August of this year, execution of definitive agreements on or before September 27 and closing prior to the end of the year. The proposed transaction is subject to the negotiation and execution of a definitive agreement and approval of such definitive agreement and the transactions contemplated thereunder by PAA’s board of directors, a conflicts committee to be established by the board of directors of PNG and the unitholders of PNG. There can be no assurance that any such approvals will be forthcoming, that a definitive agreement will be executed or that any transaction will be consummated.

PAA owns approximately 28.2 million common units of PNG, which represents approximately 46% of PNG’s issued and outstanding common units. PAA also owns PNG’s general partner, as well as all of PNG’s incentive distribution rights and all of its Series A subordinated units (approximately 11.9 million units) and Series B subordinated units (13.5 million units).

LNG World News Staff, August 28, 2013; Image: Plains All American Pipeline


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