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Plains All American Pipeline, L.P.
PAA today announced that it has
submitted a proposal to the independent directors of the board of directors of
the general partner of PAA Natural Gas Storage, L.P.
PNG 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.
“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,” said Greg L. Armstrong, Chairman and CEO of PAA. “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.
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