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SEC Filings
ENERGY TRANSFER PARTNERS, L.P. filed this Form SC TO-T on 05/18/2017
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assets, and did not perform a liquidation analysis, because it considers PennTex to be a viable going concern. Therefore, no appraisal of liquidation value was sought for purposes of valuing the PennTex common units, and ETP believes that the liquidation value of PennTex common units is irrelevant to a determination as to whether the offer is fair to unaffiliated stockholders.

While ETP considered the trading history of the PennTex common units and noted that at various times, this trading history reflected prices above the offer price, ETP concluded that these factors were not important in determining present value. In ETP’s judgment, the historical trading prices for PennTex common units are not indicative of the value of the PennTex common units as of the date of this offer in light of PennTex’s current business operations and future prospects.

ETP is not aware of any firm offers made by third parties to acquire PennTex during the past two years and did not solicit any such offers during the period that it has owned the PennTex general partner. In any event, ETP has no intention of selling the PennTex common units (or any of the general partner interest, incentive distribution rights or subordinated units of PennTex) beneficially owned by it, and therefore did not consider the possibility that any such offers might be made in reaching its conclusion as to fairness.

ETP’s consideration of the factors described above reflects its assessment of the fairness of the offer price payable in the offer and, if available, the exercise of the limited call right to unaffiliated holders of PennTex common units (including holders of PennTex common units who tender their PennTex common units in the offer as well as holders of PennTex common units who decline to tender their PennTex common units and whose PennTex common units are instead acquired through the exercise of the limited call right, assuming the minimum tender condition is met) in relation to the going concern value of PennTex on a stand-alone basis. ETP implicitly considered the value of PennTex in a sale as a going concern by taking into account PennTex’s current and anticipated business, financial conditions, results and operations, prospects and other forward-looking matters. ETP did not, however, explicitly calculate a stand-alone going concern value of PennTex because ETP believes that going concern value is not an appropriate method of determining the value of the PennTex common units for purposes of the offer and the exercise of the limited call right. In light of the fact that ETP already has, and will continue to have, control of PennTex, and that ETP remains unwilling to sell its PennTex common units, ETP does not believe that it would be appropriate for the PennTex common units held by the unaffiliated holders to be valued on a basis that includes a control premium.

The foregoing discussion of the information and factors considered and weight given by ETP is not intended to be exhaustive, but includes the material factors considered by ETP. ETP’s views as to the financial and procedural fairness of the offer and exercise of the limited call right should not be construed as a recommendation to any holder of PennTex common units as to whether the holder should tender the holder’s PennTex common units in the offer or seek to remain as a holder of PennTex common units.


4. Summary of Presentation of Management of ETP’s General Partner to the Board of Directors of ETP’s General Partner

On May 17, 2017, management of ETP’s general partner made an oral presentation to the board of directors of ETP’s general partner regarding the offer and the proposed offer price of $20.00. In this presentation, management discussed the trading history of the PennTex common units on the Nasdaq, pointing out that the PennTex common units have traded between $14.01 and $18.00 over the 52-week period preceding May 15,



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