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PAA Natural Gas Receives Buyout Proposal from Plains
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Plains All American Pipeline, L.P. has submitted a proposal to the independent directors of the board of directors of the general partner of PAA Natural Gas Storage, L.P. to acquire all of PNG’s outstanding publicly-held common units through a unit-for-unit exchange.
PAA is proposing consideration of 0.435 common units of PAA for each issued and outstanding publicly-held PNG common unit in a transaction that would be structured as a merger of PNG with a wholly-owned subsidiary of PAA. The proposed consideration represents a value per PNG common unit of $22.74 based on the trailing 10-day average closing price of PAA’s common units through August 26, 2013.
Greg L. Armstrong, Chairman and CEO of PAA, commented: "While PAA shares PNG’s positive views about the intermediate to long term outlook for natural gas storage, it is difficult to predict the timing and extent of a recovery in natural gas storage market conditions. Accordingly, it is clear that the next several years will be challenging for PNG on a stand-alone basis. We believe that the proposal provides an attractive opportunity for PNG’s common unitholders to realize a value that reflects an appropriate balance between the intermediate to long term value of PNG’s storage business and the uncertainty associated with a near-term challenging environment."
The proposed transaction is subject to the negotiation and execution of a definitive agreement and approval of such definitive agreement and the transactions contemplated thereunder by PAA’s board of directors, a conflicts committee to be established by the board of directors of PNG and the unitholders of PNG. There can be no assurance that any such approvals will be forthcoming, that a definitive agreement will be executed or that any transaction will be consummated.