The first of a multi-step action plan for the overall retail business
Ultimate intention to create a stand-alone diversified retail business
Significant commercial/operational synergies
Benefits from future growth via built in drop downs and external
Transaction is accretive to DCF per unit for ETP while expected to be
credit ratings neutral
Level of cash flow accretion is expected to increase as the overall
action plan is executed
DALLAS--(BUSINESS WIRE)--Apr. 28, 2014--
Energy Transfer Partners, L.P. (NYSE:ETP)
today announced that it has entered into a definitive merger
agreement whereby ETP plans to acquire Susser Holdings Corporation
(NYSE:SUSS) in a unit and cash transaction valued at a total
consideration of approximately $1.8 billion. By acquiring Susser
Holdings, ETP will own the general partner (GP) interest and the
incentive distribution rights (IDRs) in Susser Petroleum Partners LP
(NYSE:SUSP), approximately 11 million SUSP common units (representing
approximately 50.2 % of SUSP’s outstanding units), and SUSS’ existing
retail operations, consisting of 630 convenience store locations.
Under the terms of the merger agreement, which has been unanimously
approved by the Boards of Directors of ETP and SUSS, the shareholders of
Susser Holdings will have the option to elect to receive either $80.25
in cash or 1.4506 ETP common units, or a combination of both, for each
share held. The shareholder election is subject to proration to ensure
that aggregate cash paid and common units issued will each represent 50%
of the aggregate merger consideration. Given the capital appreciation
embedded in the stock price of Susser Holdings, the receipt of ETP units
on a tax deferred basis should be attractive to long-term Susser
ETP has entered into a support agreement with shareholders representing
10% of the outstanding Susser Holdings’ shares, pursuant to which such
shareholders have agreed to vote their shares in favor of the merger and
to elect to receive 100% ETP common units as their consideration,
subject to the same pro ration as all other shareholders.
Susser Holdings has achieved a remarkable track record of sustained
earnings growth and currently operates 630 retail convenience stores
that sell either nationally or regionally branded gasoline or sell
gasoline under the “Stripes” brand. Through these retail stores and its
fuel distribution network, Susser Holdings is also one of the largest
non-refiner suppliers of motor fuel in Texas with 1.6 billion gallons
sold in 2013. The focus of Susser Holdings in Texas and its neighboring
states has allowed it to capitalize on the strong Texas economy, as well
as the demographic changes occurring in these markets.
“The combination with Energy Transfer Partners and Sunoco is the right
next step for Susser Holdings and delivers significant value for Susser
Holdings shareholders. This transaction also enables our shareholders
who elect ETP units to participate in the future growth of the retail
business,” said Sam L. Susser, Chairman and CEO of Susser.
Bob Owens, CEO and President of Sunoco, Inc., added, “The combination of
Susser and our Sunoco retail business creates a platform to build a best
in class and unique business that is well diversified by both geography
and product lines.”
The addition of Susser to the Sunoco network of more than 5,000 retail
stores, primarily on the East Coast, broadens Sunoco's geographic
footprint by giving it an exceptional base in Texas and the surrounding
states. The pro-forma business will have tremendous fuel and retail
capabilities that are expected to generate sustained earnings growth
Overall, synergy opportunities are expected to exceed $70 million
annually from fuel, merchandising and improved “buying power” reflecting
economies of scale. Those commercial and operational synergies are
expected to be realized within 6 - 12 months post-closing. Additional
savings are likely as systems and processes from both businesses are
Multi-Step Action Plan
Our overall retail business strategy is expected to take place in
several steps. The first step is for ETP to acquire SUSS and on closing,
to migrate the SUSP GP/IDRs directly to ETP.
Post-closing, it is ETP’s intention to drop down to SUSP, in a
synchronized series of drop downs, all of the combined retail
businesses. The consideration for the drop downs is expected to be a
combination of SUSP units and cash. The cash proceeds to ETP from drop
downs will provide for further deleveraging and capital for new growth.
This drop down plan also establishes a means to allow ETP to completely
segregate the combined retail business into SUSP, with its own access to
capital and balance sheet. Any drop downs would require approvals of the
Board of Directors of SUSP and ETP.
In addition to the drop downs, ETP expects the SUSP IDR cash flow it
receives to continue to grow as SUSP cash flows grow through organic
growth, acquisitions and expected synergies. ETP then anticipates that
it would propose to Energy Transfer Equity, L.P. (NYSE: ETE) that ETP
transfer to ETE the GP/IDRs of SUSP in exchange for ETP units currently
held by ETE. Any transfer of the GP/IDRs of SUSP to ETE in exchange for
ETP units held by ETE would be subject to the approval of the Board of
Directors of each of ETE and ETP.
The creation of a strong and diversified stand-alone retail business
that provides significant value and synergy opportunities and a
platform for future growth.
The anticipated Sunoco and SUSS drop downs into SUSP gives the overall
retail business its own identity, tremendous scale, geographic and
cash flow diversification, while eventually separating it from ETP.
Transaction is immediately accretive to distributable cash flow for
ETP and is expected to be credit ratings neutral.
Each additional step in the overall action plan is expected to be
incrementally cash flow accretive to ETP.
Bob Owens, President and Chief Executive Officer of Sunoco, Inc. will
serve as the President and CEO of the combined businesses, reporting to
Kelcy Warren, Chairman and CEO of ETP. Sam L. Susser will continue as
Chairman of SUSP.
The management team will combine members from both organizations to
prepare for and execute the integration of the combined businesses.
Other Transaction Details
The transaction has been unanimously approved by the Board of Directors
of each ETP and Susser Holdings and is expected to close in the third
quarter of 2014, subject to approval of the shareholders of Susser
Holdings and customary regulatory approvals.
SUSP will continue to be traded on the New York Stock Exchange (NYSE) as
a separate publicly traded master limited partnership (MLP) and maintain
its current headquarters in Houston, Texas.
In conjunction with the transaction, ETE has agreed to relinquish its
right to $35 million of annual incentive distributions from ETP to which
it would otherwise be entitled. Such relinquishment will continue for a
period ending on the earlier of 10 years or the date of the exchange of
the SUSP GP/IDRs to ETE.
Barclays and Credit Suisse acted as financial advisors, Morgan Stanley &
Co. LLC delivered a fairness opinion to the Board of ETP. Vinson &
Elkins acted as legal counsel to ETP, and Bingham McCutchen acted as tax
counsel to ETP. BofA Merrill Lynch acted as financial advisor and
Gibson, Dunn & Crutcher LLP acted as legal counsel to Susser.
Conference Call Details
Energy Transfer and Susser will hold a joint conference call to discuss
the merger April 28, 2014, at 8:00a.m., Central Time (9:00a.m., Eastern
The dial-in number for the call is (800) 510-0146 in the United States,
or +1(617) 614-3449 outside the United States, passcode 29204479. A live
webcast of the call may be accessed on the investor relations page of
Energy Transfer’s website at www.energytransfer.com
or Sussers’s website at www.susser.com.
The call will be available for replay from 04/28/20141:00p.m., Central
Time – 05/05/201411:59p.m., Central Time by dialing (888) 286-8010,
passcode 61684778. A replay of the broadcast will also be available on
Energy Transfer’s and Susser’s websites.
In connection with the transaction, ETP and SUSS will file a joint proxy
statement / prospectus and other documents with the SEC. Investors and
security holders are urged to carefully read the definitive joint proxy
statement / prospectus when it becomes available because it will contain
important information regarding ETP, SUSS, and the transaction.
A definitive joint proxy statement / prospectus will be sent to
stockholders of Susser seeking their approval of the transaction.
Investors and security holders may obtain a free copy of the definitive
joint proxy statement / prospectus (when available) and other documents
filed by ETP and SUSS with the SEC at the SEC's website, www.sec.gov.
The definitive joint proxy statement / prospectus (when available) and
such other documents relating to ETP may also be obtained free of charge
by directing a request to Energy Transfer Partners, L.P., Attn: Investor
Relations, 3738 Oak Lawn Avenue, Dallas, Texas 75219, or from ETP's
The definitive joint proxy statement / prospectus (when available) and
such other documents relating to SUSS may also be obtained free of
charge by directing a request to Susser Holdings Corporation, Attn:
Investor Relations, 4525 Ayers St.Corpus Christi, Texas 78415, or from
SUSS's website, www.susser.com.
ETP, SUSS and their respective directors and executive officers may,
under the rules of the SEC, be deemed to be "participants" in the
solicitation of proxies in connection with the proposed transaction.
Information regarding directors and executive officers of ETE’s general
partner is contained in ETE’s Form 10-K for the year ended December 31,
2013, which has been filed with the SEC. Information regarding directors
and executive officers of ETP’s general partner is contained in ETP’s
Form 10-K for the year ended December 31, 2013, which has been filed
with the SEC. Information regarding Susser’s directors and executive
officers is contained in Susser’s definitive proxy statement dated April
14, 2014, which is filed with the SEC. A more complete description will
be available in the registration statement and the proxy
Energy Transfer Partners, L.P. (NYSE: ETP) is a master limited
partnership owning and operating one of the largest and most diversified
portfolios of energy assets in the United States. ETP currently owns and
operates approximately 35,000 miles of natural gas and natural gas
liquids pipelines. ETP owns 100% of Panhandle Eastern Pipe Line Company,
LP (the successor of Southern Union Company) and Sunoco, Inc., and a 70%
interest in Lone Star NGL LLC, a joint venture that owns and operates
natural gas liquids storage, fractionation and transportation assets.
ETP also owns the general partner, 100% of the incentive distribution
rights, and approximately 33.5 million common units in Sunoco Logistics
Partners L.P. (NYSE: SXL), which operates a geographically diverse
portfolio of crude oil and refined products pipelines, terminalling and
crude oil acquisition and marketing assets. ETP’s general partner is
owned by ETE. For more information, visit the Energy Transfer Partners,
L.P. web site at www.energytransfer.com.
Susser Holdings Corporation (NYSE: SUSS) is a third-generation
family led business based in Corpus Christi, Texas, that operates 630
convenience stores in Texas, New Mexico and Oklahoma, with 583 under the
Stripes® banner and 47 under the Sac-N-Pac banner. Restaurant service is
available in approximately 400 of its stores, primarily under the
proprietary Laredo Taco Company® brand. Susser Holdings also is majority
owner and owns the general partner of Susser Petroleum Partners LP. For
more information, visit the Susser Holdings Corporation website at www.susser.com.
Susser Petroleum Partners LP (NYSE: SUSP) distributes
approximately 1.6 billion gallons of motor fuel annually to Stripes®
stores, independently operated consignment locations, convenience stores
and retail fuel outlets operated by independent operators and other
commercial customers in Texas, New Mexico, Oklahoma and Louisiana.
This press release may include certain statements concerning
expectations for the future that are forward-looking statements as
defined by federal law. Such forward-looking statements are subject to a
variety of known and unknown risks, uncertainties, and other factors
that are difficult to predict and many of which are beyond management’s
control , including the ability to consummate the proposed transaction;
the ability to obtain the requisite regulatory approvals, Susser
shareholder approval and the satisfaction of other conditions to
consummation of the transaction; the ability of ETP to successfully
integrate Susser’s operations and employees; the ability to realize
anticipated synergies and cost savings; the potential impact of
announcement of the transaction or consummation of the transaction on
relationships, including with employees, suppliers, customers and
competitors; and the ability to achieve revenue growth. An extensive
list of factors that can affect future results are discussed in ETP’s
Annual Reports on Form 10-K and other documents filed from time to time
with the SEC Commission. The Partnerships undertake no obligation to
update or revise any forward-looking statement to reflect new
information or events.
The information contained in this press release is available on our
website at www.energytransfer.com.
Source: Energy Transfer Partners, L.P. and Susser Holdings Corporation
Energy Transfer Partners, L.P.
Susser Holdings Corporation
Mary E. Sullivan, 361-693-3743
President, Chief Financial Officer
E.V. (Chip) Bonner, Jr.,
Executive Vice President & General Counsel