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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 19, 2011
ENERGY TRANSFER EQUITY, L.P.
(Exact name of Registrant as specified in its charter)
         
Delaware
(State or other jurisdiction
of incorporation)
  001-32740
(Commission
File Number)
  30-0108820
(IRS Employer
Identification Number)
3738 Oak Lawn
Dallas, Texas 75219

(Address of principal executive offices, including zip code)
(214) 981-0700
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
þ   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 


TABLE OF CONTENTS

Item 7.01. Regulation FD Disclosure
Item 8.01. Other Events
Item 9.01. Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
EX-99.1
EX-99.2


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Item 7.01. Regulation FD Disclosure.
     Energy Transfer Equity, L.P. (the “Partnership”) and Southern Union Company (“SUG”) issued a joint press release announcing that the two companies have entered into an amended and restated merger agreement pursuant to which the Partnership will acquire SUG for $9.4 billion, including $5.7 billion in cash and common units of the Partnership. Under the terms of the amended and restated merger agreement, SUG stockholders can elect to exchange their common shares for $44.25 in cash or 1.000 common unit of the Partnership. The maximum cash component is 60% of the aggregate consideration and the common unit component can fluctuate between 40% and 50%. Elections in excess of either the cash or common unit limits will be subject to proration. Consistent with the increase in the merger consideration, the termination fees and expense reimbursement contemplated by the existing merger agreement have been increased to $181.3 million and $54.0 million, respectively.
     A copy of the joint press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
     The Partnership and Energy Transfer Partners, L.P. (“ETP”) issued a joint press release announcing that the two partnerships have entered into an amended definitive merger agreement pursuant to which it is anticipated SUG will cause the contribution to ETP of a 50% interest in Citrus Corp., which owns 100% of the Florida Gas Transmission pipeline system and is currently jointly owned by SUG and El Paso Corporation, in exchange for approximately $1.895 billion in cash and $105 million of ETP common units, contemporaneous with the completion of the merger between the Partnership and SUG. A copy of the joint press release is furnished herewith as Exhibit 99.2 and is incorporated herein by reference.
     In accordance with General Instruction B.2 of Form 8-K, the information set forth in this Item 7.01 and in the attached Exhibits 99.1 and 99.2 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
Item 8.01. Other Events.
     To the extent required, the information included in Item 7.01 of this Form 8-K is hereby incorporated by reference into this Item 8.01.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
     
Exhibit Number   Description
Exhibit 99.1
  Energy Transfer Equity, L.P. Press Release dated July 19, 2011 Announcing Entry into Amended and Restated Agreement and Plan of Merger with Southern Union Company.
 
   
Exhibit 99.2
  Energy Transfer Equity, L.P. Press Release dated July 19, 2011 Announcing Entry into Amended Agreement and Plan of Merger with Energy Transfer Partners, L.P.

 


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SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  Energy Transfer Equity, L.P.
 
 
  By:   LE GP, LLC,    
    its general partner   
       
Date: July 19, 2011  By:   /s/ John W. McReynolds    
    John W. McReynolds   
    President and Chief Financial Officer   
 

 


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EXHIBIT INDEX
     
Exhibit Number   Description
Exhibit 99.1
  Energy Transfer Equity, L.P. Press Release dated July 19, 2011 Announcing Entry into Amended and Restated Agreement and Plan of Merger with Southern Union Company.
 
   
Exhibit 99.2
  Energy Transfer Equity, L.P. Press Release dated July 19, 2011 Announcing Entry into Agreement and Plan of Merger with Energy Transfer Partners, L.P.

 

exv99w1
Exhibit 99.1
(ENERGY TRANSFER LOGO)   (Southern Union Company)
ENERGY TRANSFER EQUITY AND SOUTHERN UNION ANNOUNCE IMPROVED AGREEMENT FOR $9.4 BILLION,
INCLUDING $5.7 BILLION IN CASH AND ETE COMMON UNITS
Agreement provides Southern Union shareholders $44.25 per share in cash or significant potential
upside in owning ETE common units
DALLAS and HOUSTON July 19, 2011 — Energy Transfer Equity, L.P. (NYSE:ETE) and Southern Union Company (NYSE:SUG) today announced that they have entered into an amended and restated merger agreement under which ETE will acquire SUG for $9.4 billion, including $5.7 billion in cash and ETE common units.
Under the terms of the revised agreement, which has been unanimously approved by the boards of directors of both companies, SUG shareholders can elect to exchange their common shares for $44.25 of cash or 1.000x ETE common unit. The maximum cash component is 60% of the aggregate consideration and the common unit component can fluctuate between 40% and 50%. Elections in excess of either the cash or common unit limits will be subject to proration.
“Our ability to be creative with our structure has improved the tax efficiency, therefore allowing us to increase our price,” said Kelcy Warren, ETE’s Chairman of the Board of Directors and largest unitholder. “This is simply a superior transaction with upside potential and the ability to close on an expedited basis. The terms of this revised agreement demonstrate our commitment to executing this transaction.”
ETE has received revised support agreements in connection with the revised merger agreement from shareholders representing 14% of SUG’s total shares outstanding, who have agreed to pre-elect to receive ETE common units as their consideration, subject to the same proration as all other shareholders.
George L. Lindemann, Chairman and CEO of SUG, said, “This revised merger agreement provides our shareholders with superior value, greater certainty to close, and unrivalled strategic benefits that could not be achieved through any other industry combination.”
Eric D. Herschmann, Vice Chairman, President and COO of SUG, added, “We have negotiated the most compelling transaction for Southern Union shareholders, both in terms of immediate cash value and potential upside of the combined companies through long-term equity ownership in ETE.”
The revised merger agreement provides, at the SUG shareholders’ option, certainty of value through substantial cash consideration per SUG share and significant potential upside from ETE common units at a compelling fixed exchange ratio and on a tax-deferred basis. The merger is not subject to any financing condition and is supported by approximately $3.7 billion in committed financing from Credit Suisse.

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In connection with the revised merger agreement, ETE has signed an amended drop down agreement to sell SUG’s 50% interest in Citrus Corp., which owns 100% of the Florida Gas Transmission pipeline system, to Energy Transfer Partners, L.P. (NYSE: ETP) for total consideration of $2.0 billion. The obligations of ETE are to be assumed by SUG immediately prior to closing of the ETE/SUG merger. The proceeds received will be used to fund a portion of the merger consideration and to repay existing SUG-related debt to maintain appropriate investment grade credit metrics. The sale of this interest in Citrus Corp. is not subject to any financing condition on the part of ETP or ETP unitholder approval and is not a condition to the consummation of the SUG merger.
As previously announced, in a sign of its commitment and confidence that it can complete this transaction in or before the first quarter of 2012, ETE has agreed to divest businesses, to the extent required by regulators, to ensure federal anti-trust approvals for the proposed ETE / SUG transaction will not delay or prohibit the closing. ETE has already begun the approval process with its S-4 Proxy Filing, HSR and Missouri regulatory filings.
Credit Suisse Securities (USA) LLC acted as exclusive financial advisor to ETE, with Latham & Watkins LLP, Bingham McCutchen LLP and Potter Anderson having acted as legal counsel.
Evercore Partners and Goldman Sachs Group Inc are serving as financial advisors to the Special Committee of the board of directors of SUG. Sullivan & Cromwell LLP and Morris Nichols Arhst and Tunnell LLP are serving as legal advisors to the Special Committee. Locke Lord Bissell & Liddell LLP and Roberts & Holland LLP are serving as legal counsel to SUG.
Energy Transfer Equity, L.P. (NYSE:ETE) is a publicly traded partnership, which owns the general partner and 100 percent of the incentive distribution rights (IDRs) of ETP and approximately 50.2 million ETP limited partner units; and owns the general partner and 100 percent of the IDRs of RGNC and approximately 26.3 million RGNC limited partner units. For more information, visit the Energy Transfer Equity, L.P. web site at www.energytransfer.com.
Energy Transfer Partners, L.P. (NYSE:ETP) is a publicly traded partnership owning and operating a diversified portfolio of energy assets. ETP has pipeline operations in Arizona, Arkansas, Colorado, Louisiana, New Mexico, Utah and West Virginia and owns the largest intrastate pipeline system in Texas. ETP currently has natural gas operations that include more than 17,500 miles of gathering and transportation pipelines, treating and processing assets, and three storage facilities located in Texas. ETP also holds a 70 percent interest in Lone Star NGL LLC (“Lone Star”), a joint venture that owns and operates NGL storage, fractionation and transportation assets in Texas, Louisiana and Mississippi. ETP is also one of the three largest retail marketers of propane in the United States, serving more than one million customers across the country. For more information, visit the Energy Transfer Partners, L.P. web site at www.energytransfer.com.
Regency Energy Partners LP (NASDAQ:RGNC) is a growth-oriented, midstream energy partnership engaged in the gathering, contract compression, processing, marketing and transporting of natural gas and natural gas liquids. RGNC also owns the remaining 30 percent interest in Lone Star. RGNC’s general partner is owned by ETE. For more information, visit the Regency Energy Partners LP web site at www.regencyenergy.com.
Southern Union Company (NYSE:SUG), headquartered in Houston, is one of the nation’s leading diversified natural gas companies, engaged primarily in the transportation, storage, gathering, processing and distribution of natural gas. The company owns and operates one of the

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nation’s largest natural gas pipeline systems with more than 20,000 miles of gathering and transportation pipelines and one of North America’s largest liquefied natural gas import terminals, along with serving more than half a million natural gas end-user customers in Missouri and Massachusetts. For further information, visit www.sug.com.
Forward-Looking Statements
This press release may include certain statements concerning expectations for the future, including statements regarding the anticipated benefits and other aspects of the proposed transactions described above, 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 the control of the management teams of ETE, ETP, RGNC or SUG. Among those is the risk that conditions to closing the transactions are not met or that the anticipated benefits from the proposed transactions cannot be fully realized. An extensive list of factors that can affect future results are discussed in the reports filed with the Securities and Exchange Commission by ETE, ETP, RGNC and SUG. Neither ETE, ETP, RGNC nor SUG undertakes any obligation to update or revise any forward-looking statement to reflect new information or events.
Additional Information
In connection with the transaction, ETE and SUG have filed a proxy statement / prospectus and other documents with the SEC. Investors and security holders are urged to carefully read the definitive proxy statement / prospectus because it contains important information regarding ETE, SUG and the transaction.
A definitive proxy statement / prospectus will be sent to stockholders of SUG seeking their approval of the transaction. Investors and security holders may obtain a free copy of the definitive proxy statement / prospectus and other documents filed by ETE and SUG with the SEC at the SEC’s web site, www.sec.gov. The definitive proxy statement / prospectus and such other documents relating to ETE may also be obtained free of charge by directing a request to Energy Transfer Equity, L.P., Attn: Investor Relations, 3738 Oak Lawn Avenue, Dallas, Texas 75219, or from ETE’s web site, www.energytransfer.com. The definitive proxy statement / prospectus and such other documents relating to SUG may also be obtained free of charge by directing a request to Southern Union Company, Attn: Investor Relations, 5444 Westheimer Road, Houston, Texas 77056, or from SUG’s web site, www.sug.com.
ETE, SUG 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 concerning the interests of the persons who may be “participants” in the solicitation is set forth in the proxy statement / prospectus.
The information contained in this press release is available on the ETE web site at www.energytransfer.com.
Energy Transfer Equity
Investors:
Energy Transfer Equity
Brent Ratliff
(214) 981-0700
MacKenzie Partners
Dan Burch / Lawrence Dennedy
(212) 929-5748 / (212) 929-5239

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Media:
Brunswick Group
Steve Lipin / Mark Palmer
(212) 333-3810 / (214) 459-8181
Granado Communications Group
Vicki Granado
(214) 599-8785
Southern Union Company
Investors:
Richard N. Marshall
(713) 989-2000
Media:
John P. Barnett
(713) 989-7556

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exv99w2
Exhibit 99.2
(ENERGY TRANSFER LOGO)
ENERGY TRANSFER PARTNERS ANNOUNCES AMENDED AGREEMENT FOR
50% INTEREST IN CITRUS CORP., OWNER OF FLORIDA GAS TRANSMISSION
Transaction Contingent on Consummation of Merger of Energy Transfer Equity
and Southern Union Company
DALLAS, TEXAS — July 19, 2011 — Energy Transfer Partners, LP. (NYSE:ETP) and Energy Transfer Equity, L.P. (NYSE:ETE) today announced that the two partnerships have signed an amended definitive agreement pursuant to which there will be a contribution by merger of an indirect 50% interest in Citrus Corp., which owns 100% of the Florida Gas Transmission pipeline system, to ETP in exchange for approximately $2.0 billion. The contribution by merger of the 50% equity interest in Citrus is subject to the successful consummation of the merger between Southern Union Company (NYSE:SUG) and ETE. Citrus Corp. is currently jointly owned by SUG and El Paso Corporation. The revised agreement amends the definitive merger agreement that was announced on July 5, 2011. Earlier today, ETE and SUG announced that they have entered into an amended and restated merger agreement under which ETE will acquire all of the outstanding common stock of SUG for cash and ETE common units. That acquisition is expected to close in the first quarter of 2012.
Under the terms of the amended agreement between ETE and ETP, upon the closing of ETE’s acquisition of SUG, ETP would receive the interest in Citrus in exchange for $1.9 billion of cash and $100 million of ETP common units. The remaining terms of the amended agreement between ETP and ETE are substantially similar to the agreement announced on July 5, 2011. ETP expects to fund substantially all of the cash portion of the purchase price initially through the issuance of debt and borrowings from our revolving credit facility. In turn, ETE will use these proceeds to repay a substantial portion of the acquisition financing incurred by ETE to fund the cash consideration to be paid to SUG shareholders. ETP also intends to issue sufficient additional equity to maintain its investment grade credit rating and to use the proceeds from such equity issuances to repay other indebtedness and fund capital expenditures. In order to increase the expected accretion to be derived from Citrus, ETE has agreed to relinquish its rights to approximately $220 million of the incentive distributions from ETP that ETE would otherwise be entitled to receive over 16 consecutive quarters following the closing of the transaction. Based on the projections used in connection with the transaction, it is expected that Citrus would be immediately accretive to ETP unitholders. As part of the transaction, ETE has also granted ETP a right of first offer with respect to any disposition of another SUG subsidiary, Southern Union Gas Services (SUGS). SUGS owns and operates a natural gas gathering and processing system serving the Permian Basin in West Texas and New Mexico.
The Conflicts Committee of ETP’s Board of Directors approved the transaction with ETE. All of the members of the Conflicts Committee are independent directors and had received a full delegation of authority to approve the transaction. The transaction is subject to a number of closing conditions, including the closing of the merger between ETE and SUG. ETP was advised by Vinson & Elkins LLP with respect to the transaction and Prickett, Jones & Elliott, P.A. served as counsel to the committee. RBS Securities Inc. acted as financial advisor to the committee. Credit Suisse Securities (USA) LLC acted as exclusive financial advisor to ETE, with Latham & Watkins LLP having acted as legal counsel.

 


 

Energy Transfer Partners, L.P. (NYSE:ETP) is a publicly traded partnership owning and operating a diversified portfolio of energy assets. ETP has pipeline operations in Arizona, Arkansas, Colorado, Louisiana, New Mexico, Utah and West Virginia and owns the largest intrastate pipeline system in Texas. ETP currently has natural gas operations that include more than 17,500 miles of gathering and transportation pipelines, treating and processing assets, and three storage facilities located in Texas. ETP also holds a 70 percent interest in Lone Star NGL LLC, a joint venture that owns and operates NGL storage, fractionation and transportation assets in Texas, Louisiana and Mississippi. ETP is also one of the three largest retail marketers of propane in the United States, serving more than one million customers across the country. For more information, visit the Energy Transfer Partners, L.P. web site at www.energytransfer.com.
Energy Transfer Equity, L.P. (NYSE:ETE) is a publicly traded partnership, which owns the general partner and 100 percent of the incentive distribution rights (IDRs) of ETP and approximately 50.2 million ETP limited partner units; and owns the general partner and 100 percent of the IDRs of Regency Energy Partners LP and approximately 26.3 million Regency limited partner units. For more information, visit the Energy Transfer Equity, L.P. web site at www.energytransfer.com.
This press release may include certain statements concerning expectations for the future, including statements regarding the anticipated benefits and other aspects of the proposed transactions described above, 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 the control of the management teams of ETE or ETP. Among those is the risk that conditions to closing the transactions are not met or that the anticipated benefits from the proposed transactions cannot be fully realized. An extensive list of factors that can affect future results are discussed in the reports filed with the Securities and Exchange Commission by ETE and ETP. Neither ETE nor ETP undertakes any obligation to update or revise any forward-looking statement to reflect new information or events.
Additional Information
In connection with the ETE/SUG merger, ETE and SUG have filed a proxy statement/prospectus and other documents with the SEC. Investors and security holders are urged to carefully read the definitive proxy statement/prospectus because it contains important information regarding ETE, SUG and the ETE/SUG merger.
A definitive proxy statement/prospectus will be sent to stockholders of SUG seeking their approval of the transaction. Investors and security holders may obtain a free copy of the definitive proxy statement/prospectus and other documents filed by ETE and SUG with the SEC at the SEC’s web site, www.sec.gov. The definitive proxy statement/prospectus and such other documents relating to ETE may also be obtained free of charge by directing a request to Energy Transfer Equity, L.P., Attn: Investor Relations, 3738 Oak Lawn Avenue, Dallas, Texas 75219, or from ETE’s web site, www.energytransfer.com. The definitive proxy statement/prospectus and such other documents relating to SUG may also be obtained free of charge by directing a request to Southern Union Company, Attn: Investor Relations, 5444 Westheimer Road, Houston, Texas 77056, or from SUG’s web site, www.sug.com.

 


 

ETE, SUG 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 ETE/SUG merger. Information concerning the interests of the persons who may be “participants” in the solicitation is set forth in the proxy statement/prospectus.
Investor Relations:
Brent Ratliff, 214-981-0700
or
Media Relations:
Granado Communications Group
Vicki Granado, 214-599-8785
Cell: 214-498-9272