Energy Transfer Partners has an outstanding offer of merger/acquisition with Susser Holdings Corporation. The good shareholders of Susser were each given voting opportunity to elect their method of being bought out. They could receive a) an all cash offer, b) a mixture of cash and ETP shares, or c) all ETP shares. The results were published yesterday upon closure of the window.
85% of all outstanding shareholders said “give me the ETP stock”.
That’s not even a contest. Only 1% of Susser’s shareholders took the cash buyout offer. 7% took the mixed bag. How’s that for a vote of confidence?
Obviously I had hoped more would get bought out – because I expect good things here. But still, I can’t blame them for refusing to leave.
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Energy transfer was my favorite game to play back in college.
Cain, I’m a proud holder of ETE, WMB, SEMG, and LNG. The midstream/LNG space has just been outstanding to say the least. But I wonder, why own ETP when you can own ETE, which holds the GP of ETP, and hence has more optionality down the road and has more leverage to LP/GP cashflows? As with WMB, and more recently, KMI, the GP seems to always end up on top. I know that WMB & KMI are c-corps, but still, ETE at the end of the day is running the show. So why hold ETP?
I’m thinking there were a few reasons, but I need to check my notes. However, a quick answer that is just as valid is this:
Because ETP deposits more money into my account each quarter.
This may seem silly, but cash flow is going to be important soon; we’re approaching the end game stage here of the bullmarket. I don’t know when that will be, but strategically everyone should be asking “how can I get my real cash position just a little bit higher.” A lot of my portfolio for the past year or two has been geared to higher yield positions.
If I remember to when I get home, I’ll take a look through my scribblings and try to recall what else there was.
Well I’m not sure what your definition of endgame is, but its a fair point that the GP’s are more levered vehicles so if you expect a capital market meltdown like we had in 08′-09′ then the higher quality MLP’s like ETP will hold up better. But I’d take a look at the GP holders after the correction you’re waiting for. See what KMI did with KMP & EPB? That’s likely the playbook for mature MLP’s down the road, which could be a positive for some, but not for those who have to pay a major tax bill they weren’t expecting.