Energy Transfer LP (NYSE: ET) (“Energy Transfer”) and Crestwood
Equity Partners LP (NYSE: CEQP) (“Crestwood”) announced today the
preliminary results of the elections made by holders of Crestwood’s
outstanding 9.250% Perpetual Preferred Units (the “Crestwood
Preferred Units”) regarding the form of merger consideration to be
received in connection with Energy Transfer’s pending acquisition
of Crestwood.
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As further described in the Agreement and Plan of Merger, dated
as of August 16, 2023, by and among Crestwood, Energy Transfer LP,
Pachyderm Merger Sub LLC, a direct wholly owned subsidiary of
Energy Transfer, and, solely for the purposes set forth therein, LE
GP, LLC (the “Merger Agreement”) and in the proxy
statement/prospectus filed with the U.S. Securities and Exchange
Commission (the “SEC”) on September 29, 2023 (the “Proxy
Statement/Prospectus”), holders of Crestwood Preferred Units were
entitled to elect to have their Crestwood Preferred Units: (i)
converted into common units representing limited partner interests
in Crestwood (“Crestwood Common Units”), at the then-applicable
conversion ratio (currently one Crestwood Common Unit for 10
Crestwood Preferred Units), which as-converted Crestwood Common
Units would subsequently be converted into Energy Transfer common
units upon closing of the transaction at an exchange ratio of one
Crestwood Common Unit into 2.07 Energy Transfer common units; (ii)
converted into a new Energy Transfer security that has
substantially similar terms, including with respect to economics
and structural protections, as the Crestwood Preferred Units (“New
ET Preferred Units”); or (iii) redeemed in exchange for cash or
Crestwood Common Units, at the sole discretion of the general
partner of Crestwood, at a price of $9.857484 per Crestwood
Preferred Unit plus accrued and unpaid distributions to the date of
such redemption.
Based on available information as of the election deadline of
5:00 p.m., New York City time, October 31, 2023, the preliminary
election results were as follows:
- Holders of 424,291 Crestwood Preferred Units, or approximately
0.60% of the outstanding Crestwood Preferred Units, elected to
receive Crestwood Common Units.
- Holders of 41,464,187 Crestwood Preferred Units, or
approximately 58.19% of the outstanding Crestwood Preferred Units,
either (i) elected to receive New ET Preferred Units or (ii) did
not make a valid election, and, in accordance with the Merger
Agreement, will be deemed to have elected to have their Crestwood
Preferred Units converted into New ET Preferred Units.
- Holders of 29,368,967 Crestwood Preferred Units, or
approximately 41.21% of the outstanding Crestwood Preferred Units,
elected to have their Crestwood Preferred Units redeemed in
exchange for cash or Crestwood Common Units, at the sole discretion
of the general partner of Crestwood.
The foregoing results are preliminary only, and final certified
results are not expected to be available until shortly before
closing. After the final election results are determined, the final
merger consideration, and the allocation of the merger
consideration, will be calculated in accordance with the terms of
the Merger Agreement.
About Energy Transfer
Energy Transfer LP (NYSE: ET) owns and operates one of
the largest and most diversified portfolios of energy assets in the
United States, with nearly 125,000 miles of pipeline and associated
energy infrastructure. Energy Transfer’s strategic network spans 41
states with assets in all of the major U.S. production basins.
Energy Transfer is a publicly traded limited partnership with core
operations that include complementary natural gas midstream,
intrastate and interstate transportation and storage assets; crude
oil, natural gas liquids (“NGL”) and refined product transportation
and terminalling assets; and NGL fractionation. Energy Transfer
also owns Lake Charles LNG Company, as well as the general partner
interests, the incentive distribution rights and approximately 34%
of the outstanding common units of Sunoco LP (NYSE: SUN), and the
general partner interests and approximately 47% of the outstanding
common units of USA Compression Partners, LP (NYSE: USAC). For more
information, visit the Energy Transfer LP website at
www.energytransfer.com.
About Crestwood Equity Partners LP
Houston, Texas, based Crestwood Equity Partners LP (NYSE: CEQP)
is a master limited partnership that owns and operates midstream
businesses in multiple shale resource plays across the United
States. Crestwood is engaged in the gathering, processing,
treating, compression and transportation of natural gas; storage,
transportation, terminalling, and marketing of NGLs; gathering,
storage, terminalling and marketing of crude oil; and gathering and
disposal of produced water. For more information, visit Crestwood
Equity Partners LP at www.crestwoodlp.com; and to learn more about
Crestwood’s sustainability efforts, please visit
https://esg.crestwoodlp.com.
Important Information about the Transaction and Where to Find
It
In connection with the proposed transaction between Energy
Transfer and Crestwood, Energy Transfer filed with the SEC a
registration statement on Form S-4 (the “Registration Statement”)
that includes a proxy statement of Crestwood that also constitutes
a prospectus of Energy Transfer, and each party will file other
documents regarding the proposed transaction with the SEC. The
Registration Statement was declared effective by the SEC on
September 29, 2023, and a definitive Proxy Statement/Prospectus has
been mailed to Crestwood unitholders of record as of September 22,
2023. This communication is not a substitute for the Registration
Statement, Proxy Statement/Prospectus or any other document that
Energy Transfer or Crestwood (as applicable) has filed or may file
with the SEC in connection with the proposed transaction. BEFORE
MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY
HOLDERS OF ENERGY TRANSFER AND CRESTWOOD ARE URGED TO READ THE
REGISTRATION STATEMENT, THE PROXY STATEMENT/PROSPECTUS AND ANY
OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE
SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS,
CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND
RELATED MATTERS. Investors and security holders may obtain free
copies of the Registration Statement and the Proxy
Statement/Prospectus, as each may be amended from time to time, as
well as other filings containing important information about Energy
Transfer or Crestwood, without charge at the SEC’s website, at
http://www.sec.gov. Copies of the documents filed with the SEC by
Energy Transfer are available free of charge on Energy Transfer’s
website at www.energytransfer.com under the tab “Investor
Relations” and then under the tab “SEC Filings” or by directing a
request to Investor Relations, Energy Transfer LP, 8111 Westchester
Drive, Suite 600, Dallas, TX 75225, Tel. No. (214) 981-0795 or to
investorrelations@energytransfer.com. Copies of the documents filed
with the SEC by Crestwood are available free of charge on
Crestwood’s website at www.crestwoodlp.com under the tab
“Investors” and then under the tab “SEC Filings” or by directing a
request to Investor Relations, Crestwood Equity Partners LP, 811
Main Street, Suite 3400, Houston, TX 77002, Tel. No. (832) 519-2200
or to investorrelations@crestwoodlp.com. The information included
on, or accessible through, Energy Transfer’s or Crestwood’s website
is not incorporated by reference into this communication.
Participants in the Solicitation
Energy Transfer, Crestwood and the directors and certain
executive officers of their respective general partners may be
deemed to be participants in the solicitation of proxies in respect
of the proposed transaction. Information about the directors and
executive officers of Crestwood’s general partner is set forth in
its proxy statement for its 2023 annual meeting of unitholders,
which was filed with the SEC on March 31, 2023, and in its Annual
Report on Form 10-K for the year ended December 31, 2022, which was
filed with the SEC on February 27, 2023. Information about the
directors and executive officers of Energy Transfer’s general
partner is set forth in its Annual Report on Form 10-K for the year
ended December 31, 2022, which was filed with the SEC on February
17, 2023. Additional information regarding the participants in the
proxy solicitation and a description of their direct or indirect
interests, by security holdings or otherwise, is contained in the
Proxy Statement/Prospectus and other relevant materials filed with
the SEC.
No Offer or Solicitation
This communication is for informational purposes only and is not
intended to, and shall not, constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any offer, issuance,
exchange, transfer, solicitation or sale of securities in any
jurisdiction in which such offer, issuance, exchange, transfer,
solicitation or sale would be in contravention of applicable law.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended (the “Securities Act”).
Forward-Looking Statements
This communication contains “forward-looking statements.”. In
this context, forward-looking statements often address future
business and financial events, conditions, expectations, plans or
ambitions, and often include, but are not limited to, words such as
“believe,” “expect,” “may,” “will,” “should,” “could,” “would,”
“anticipate,” “estimate,” “intend,” “plan,” “seek,” “see,” “target”
or similar expressions, or variations or negatives of these words,
but not all forward-looking statements include such words.
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain, such as statements about the
consummation of the proposed transaction and the anticipated
benefits thereof. All such forward-looking statements are based
upon current plans, estimates, expectations and ambitions that are
subject to risks, uncertainties and assumptions, many of which are
beyond the control of Energy Transfer and Crestwood, that could
cause actual results to differ materially from those expressed in
such forward-looking statements. Important risk factors that may
cause such a difference include, but are not limited to: the
completion of the proposed transaction on anticipated terms and
timing, or at all; anticipated tax treatment, unforeseen
liabilities, future capital expenditures, revenues, expenses,
earnings, synergies, economic performance, indebtedness, financial
condition, losses, future prospects, business and management
strategies for the management, expansion and growth of the combined
company’s operations and other conditions to the completion of the
merger, including the possibility that any of the anticipated
benefits of the proposed transaction will not be realized or will
not be realized within the expected time period; the ability of
Energy Transfer and Crestwood to integrate their businesses
successfully and to achieve anticipated synergies and value
creation; potential litigation relating to the proposed transaction
that could be instituted against Energy Transfer, Crestwood or the
directors of their respective general partners; the risk that
disruptions from the proposed transaction will harm Energy
Transfer’s or Crestwood’s business, including current plans and
operations and that management’s time and attention will be
diverted on transaction-related issues; potential adverse reactions
or changes to business relationships, including with employees
suppliers, customers, competitors or credit rating agencies,
resulting from the announcement or completion of the proposed
transaction; rating agency actions and Energy Transfer and
Crestwood’s ability to access short- and long-term debt markets on
a timely and affordable basis; legislative, regulatory and economic
developments, changes in local, national, or international laws,
regulations, and policies affecting Energy Transfer and Crestwood;
potential business uncertainty, including the outcome of commercial
negotiations and changes to existing business relationships during
the pendency of the proposed transaction that could affect Energy
Transfer’s and/or Crestwood’s financial performance and operating
results; certain restrictions during the pendency of the merger
that may impact Crestwood’s ability to pursue certain business
opportunities or strategic transactions or otherwise operate its
business; acts of terrorism or outbreak of war, hostilities, civil
unrest, attacks against Energy Transfer or Crestwood, and other
political or security disturbances; dilution caused by Energy
Transfer’s issuance of additional units representing limited
partner interests in connection with the proposed transaction; the
possibility that the transaction may be more expensive to complete
than anticipated, including as a result of unexpected factors or
events; the impacts of pandemics or other public health crises,
including the effects of government responses on people and
economies; changes in the supply, demand or price of oil, natural
gas, and natural gas liquids; those risks described in Item 1A of
Energy Transfer’s Annual Report on Form 10-K, filed with the SEC on
February 17, 2023, and its subsequent Quarterly Reports on Form
10‑Q and Current Reports on Form 8-K; those risks described in Item
1A of Crestwood’s Annual Report on Form 10-K, filed with the SEC on
February 27, 2023, and its subsequent Quarterly Reports on Form
10-Q and Current Reports on Form 8-K; and those risks that are
described in the Registration Statement and the accompanying Proxy
Statement/Prospectus filed with the SEC in connection with the
proposed transaction.
While the list of factors presented here, in the Registration
Statement and in the Proxy Statement/Prospectus is considered
representative, no such list should be considered to be a complete
statement of all potential risks and uncertainties. Unlisted
factors may present significant additional obstacles to the
realization of forward-looking statements. Energy Transfer and
Crestwood caution you not to place undue reliance on any of these
forward-looking statements as they are not guarantees of future
performance or outcomes and that actual performance and outcomes,
including, without limitation, our actual results of operations,
financial condition and liquidity, and the development of new
markets or market segments in which we operate, may differ
materially from those made in or suggested by the forward-looking
statements contained in this communication. Neither Energy Transfer
nor Crestwood assumes any obligation to publicly provide revisions
or updates to any forward-looking statements, whether as a result
of new information, future developments or otherwise, should
circumstances change, except as otherwise required by securities
and other applicable laws. Neither future distribution of this
communication nor the continued availability of this communication
in archive form on Energy Transfer’s or Crestwood’s website should
be deemed to constitute an update or re-affirmation of these
statements as of any future date.
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Energy Transfer LP Investor Relations: Bill Baerg, Brent
Ratliff, Lyndsay Hannah, 214-981-0795 Media Relations:
Media@energytransfer.com 214-840-5820 Crestwood Equity Partners LP
Investor Contact Andrew Thorington, 713-380-3028
andrew.thorington@crestwoodlp.com Vice President, Finance and
Investor Relations Sustainability and Media Contact Joanne
Howard, 832-519-2211 joanne.howard@crestwoodlp.com Senior Vice
President, Sustainability and Corporate Communications
Crestwood Equity Partners (NYSE:CEQP)
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