Print Page | Close Window
SEC Filings
SC TO-T
ENERGY TRANSFER PARTNERS, L.P. filed this Form SC TO-T on 05/18/2017
Entire Document
 << Previous Page | Next Page >>


 

unaffiliated holders of PennTex common units because if the minimum tender condition is not satisfied, ETP will only able to consummate the offer if a majority of the unaffiliated holders of PennTex common units have validly tendered and not properly withdrawn their PennTex common units;

 

    Each holder of PennTex common units will be able to decide voluntarily whether or not to tender PennTex common units in the offer and, assuming the minimum tender condition is met or, if that condition is waived, that ETP and its affiliates own more than 80% of the PennTex common units outstanding after the offer is completed, if the offer and exercise of the limited call right are completed and any such holder of PennTex common units has elected not to tender, the holder will be entitled to receive not less than the same type and amount of consideration from the exercise of the limited call right that the holder would have received in the offer; and

 

    Unaffiliated holders of PennTex common units will have sufficient time to make a decision whether or not to tender because the offer will remain open for at least twenty (20) business days (unless extended by ETP). If ETP amends the offer to include any material additional information, ETP will, if necessary to allow adequate dissemination and investor response, extend the offer for a sufficient period to allow holders of PennTex common units to consider the amended information.

ETP also considered the following factors, each of which it considered negatively in its considerations concerning the fairness of the terms of the offer and, assuming the minimum tender condition is met, the exercise of the limited call right:

 

    With respect to the offer price, ETP’s financial interest in acquiring the PennTex common units for a low price is adverse to the financial interest of other holders of PennTex common units in selling their PennTex common units for a high price;

 

    PennTex common units have in the past traded at higher levels than the offer price. PennTex common units reached an all-time high trading price of $21.02 per PennTex common unit in the second quarter of 2015 and an all-time low trading price of $9.01 per PennTex common unit in the second quarter of 2016. This trading price history suggests that certain holders of PennTex common units may have acquired their PennTex common units at prices higher than the current trading levels and at a higher price than the offer price;

 

    If the minimum tender condition is waived, PennTex common units will remain outstanding, but could be ineligible to continue trading on the Nasdaq or any other national securities exchange, and the more limited number of holders of PennTex common units could result in a lower liquidity and trading volume in the PennTex common units;

 

    The offer and the exercise of the limited call right has not been reviewed or approved by the conflicts committee of the board of directors of the PennTex General Partner;

 

    ETP has not requested or received any opinion as to the fairness of the offer or the exercise of the limited call right, from a financial point of view, to the unaffiliated holders of PennTex common units;

 

    Any holder of PennTex common units who tenders all its PennTex common units in the offer or has its PennTex common units purchased in the exercise of the limited call right will cease to participate in future earnings or growth, if any, of PennTex and will not benefit from increases, if any, in PennTex’s value, including any increases due to a general economic improvement; and

 

    As described in The Tender Offer—Material U.S. Federal Income Tax Consequences, the tender of PennTex common units in the offer will be a taxable transaction to holders of PennTex common units.

ETP did not find it practicable to assign, nor did it assign, specific relative weights to the individual factors considered in reaching its conclusion as to fairness. ETP also did not consider the liquidation value of PennTex’s

 

14

 << Previous Page | Next Page >>