IFM Investors and Buckeye Partners, L.P. (NYSE: BPL) today
announced a definitive agreement ("Agreement") under which the IFM
Global Infrastructure Fund will acquire all of the
outstanding public common units of Buckeye for $41.50 per common
unit. The all-cash transaction is valued at $10.3 billion
enterprise value and $6.5 billion equity value. The
acquisition price represents a 27.5% premium to Buckeye’s closing
unit price on May 9, 2019 and a 31.9% premium to Buckeye’s
volume-weighted average unit price since November 1, 2018, which is
the last trading day prior to Buckeye’s announcement of certain
strategic actions. Buckeye’s Board of Directors unanimously
approved the proposed transaction with IFM. The closing of the
merger will be subject to approval of a majority of the Buckeye
unitholders, certain regulatory approvals and other customary
closing conditions.
Buckeye owns and operates one of the largest diversified
networks of integrated midstream assets, including 6,000 miles of
pipeline with over 100 delivery locations and 115 liquid petroleum
products terminals with aggregate tank capacity of over 118 million
barrels. Its network of marine terminals is located primarily in
the East Coast and Gulf Coast regions of the United States, as well
as in the Caribbean.
IFM is a pioneer and leader in infrastructure investing on
behalf of institutional investors globally, with a 23-year track
record of success. IFM has $90 billion of assets under management,
including $39.1 billion in infrastructure, which it manages on
behalf of more than 370 institutional investors, and takes a
long-term approach to investing, with no pre-determined time
divestiture horizon. IFM targets core infrastructure in developed
markets and currently has interests in 32 investments across North
America, Australia and Europe, including several midstream
assets.
“This acquisition is aligned with IFM’s focus on investing in
high quality, essential infrastructure assets that underpin the
economies in which they operate,” said Julio Garcia, Head of
Infrastructure, North America of IFM.
“We are pleased to have the opportunity to bring the Buckeye
business and management team under the IFM umbrella,” said Jamie
Cemm, Executive Director of IFM. “The proposed acquisition of
Buckeye is a complementary addition to IFM’s substantial
investments in energy infrastructure across North America and
globally. We look forward to supporting the continuing growth of
the business.”
“Buckeye’s Board of Directors recently reviewed strategic
options for the business and determined that IFM’s proposal to
acquire Buckeye is in the best interest of Buckeye,” said Clark C.
Smith, Chairman, President and Chief Executive Officer of Buckeye.
“The proposed transaction will provide immediate and enhanced value
for our unitholders with an attractive premium that accelerates
long-term returns and represents the underlying value of our
business. In addition, the proposed transaction will provide
Buckeye with superior access to capital to execute on its long-term
business strategy. We look forward to this next chapter in
Buckeye’s 133-year story.”
Additional Information
Closing of the transaction is expected to occur in the fourth
quarter of 2019 and is subject to customary closing conditions.
Pending transaction close, the companies will continue to operate
independently.
Evercore Group LLC is acting as lead financial advisor to IFM,
and Credit Suisse, Goldman, Sachs & Co. LLC and BofA Merrill
Lynch are acting as financial advisors to IFM. White & Case LLP
and Baker Botts LLP are acting as legal advisors to IFM.
Intrepid Partners, LLC and Wells Fargo Securities, LLC are
acting as financial advisors and Cravath, Swaine & Moore LLP is
acting as legal advisor to Buckeye.
Conference Call
Buckeye will discuss the proposed transaction with members of
executive management during its 2019 first quarter earnings
conference call and webcast today, May 10, 2019, at 11:00 a.m.
Eastern Time. To access the live webcast of the call, go to
https://edge.media-server.com/m6/p/u6g2ffa9 ten minutes prior to
the call start. Interested parties may participate in the call by
dialing 877-870-9226 and entering the conference ID 2636028.
A replay will be archived and available at the above link through
June 9, 2019, and the replay also may be accessed by dialing
800-585-8367 and entering the conference ID 2636028.
About Buckeye Partners, L.P.
Buckeye Partners, L.P. (NYSE: BPL) is a publicly traded master
limited partnership which owns and operates a diversified global
network of integrated assets providing midstream logistic
solutions, primarily consisting of the transportation, storage,
processing and marketing of liquid petroleum products. Buckeye is
one of the largest independent liquid petroleum products pipeline
operators in the United States in terms of volumes delivered, with
approximately 6,000 miles of pipeline. Buckeye also uses its
service expertise to operate and/or maintain third-party pipelines
and terminals and perform certain engineering and construction
services for its customers. Buckeye’s global terminal network
comprises more than 115 liquid petroleum products terminals with
aggregate tank capacity of over 118 million barrels across our
portfolio of pipelines, inland terminals and marine terminals
located primarily in the East Coast, Midwest and Gulf Coast regions
of the United States as well as in the Caribbean. Buckeye’s global
network of marine terminals enables it to facilitate global flows
of crude oil and refined petroleum products, offering its customers
connectivity between supply areas and market centers through some
of the world’s most important bulk storage and blending hubs.
Buckeye’s flagship marine terminal in The Bahamas, Buckeye Bahamas
Hub, is one of the largest marine crude oil and refined petroleum
products storage facilities in the world and provides an array of
logistics and blending services for the global flow of petroleum
products. Buckeye’s Gulf Coast regional hub, Buckeye Texas
Partners, offers world-class marine terminalling, storage and
processing capabilities. Buckeye is also a wholesale distributor of
refined petroleum products in certain areas served by its pipelines
and terminals. More information concerning Buckeye can be found at
www.buckeye.com.
About IFM Investors
IFM Investors is a global institutional funds manager with US$90
billion under its management as of 31 March 2019. Established more
than 20 years ago and owned by 27 Australian pension funds, IFM
Investors’ interests are deeply aligned with those of its
investors. Investment teams in Australia, Europe, North America and
Asia manage institutional strategies across debt investments,
infrastructure, listed equities and private equity. IFM Investors
has offices in nine cities: Melbourne, Sydney, London, New York,
Berlin, Tokyo, Hong Kong, Seoul and Zurich. For more information
visit: www.ifminvestors.com.
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in
respect of the proposed acquisition of Buckeye Partners, L.P.
(“Buckeye”). In connection with the proposed acquisition, Buckeye
intends to file relevant materials with the U.S. Securities and
Exchange Commission (the “SEC”), including a proxy statement in
preliminary and definitive form. Holders of Buckeye’s LP Units (the
“Unitholders”) are urged to read all relevant documents filed with
the SEC, including Buckeye’s proxy statement when it becomes
available, because they will contain important information about
the proposed transaction and the parties to the proposed
transaction. Investors and Unitholders are able to obtain the
documents (once available) free of charge at the SEC’s website at
www.sec.gov, or free of charge from Buckeye at
http://www.buckeye.com/InvestorCenter/SECFilings/tabid/222/Default.aspx
or by directing a request to Buckeye’s Investor Relations
Department at 800-422-2825 or
irelations@buckeye.com.
Participants in the Solicitation
Buckeye and its respective directors, executive officers,
general partners, limited partners and other members of management
and employees, under SEC rules, may be deemed to be “participants”
in the solicitation of proxies from Buckeye’s Unitholders in favor
of the proposed transaction. Information about the directors
and executive officers of Buckeye’s general partner is set forth in
Buckeye’s Proxy Statement on Schedule 14A for its 2019 Annual
Meeting of Limited Partners, which was filed with the SEC on April
17, 2019, and its Annual Report on Form 10-K for the fiscal year
ended December 31, 2018, which was filed with the SEC on February
15, 2019. These documents may be obtained free of charge from the
sources indicated above. Additional information regarding the
interests of these participants which may, in some cases, be
different than those of Buckeye’s Unitholders generally, will also
be included in Buckeye’s proxy statement relating to the proposed
transaction, when it becomes available.
Cautionary Note Regarding Forward-Looking
Statements
The information contained in this communication includes
“forward-looking statements.” All statements that express belief,
expectation, estimates or intentions, as well as those that are not
statements of historical facts, are forward-looking statements.
Such statements use forward-looking words such as “proposed,”
“anticipate,” “project,” “potential,” “could,” “should,”
“continue,” “estimate,” “expect,” “may,” “believe,” “will,” “plan,”
“seek,” “outlook” and other similar expressions that are intended
to identify forward-looking statements, although some
forward-looking statements are expressed differently. These
statements discuss future expectations and contain projections.
Specific factors that could cause actual results to differ from
those in the forward-looking statements include, but are not
limited to: (i) changes in federal, state, local and foreign laws
or regulations to which Buckeye is subject, including those
governing pipeline tariff rates and those that permit the treatment
of Buckeye as a partnership for federal income tax purposes; (ii)
terrorism and other security risks, including cyber risk, adverse
weather conditions, including hurricanes, environmental releases
and natural disasters; (iii) changes in the marketplace for
Buckeye’s products or services, such as increased competition,
changes in product flows, better energy efficiency or general
reductions in demand; (iv) adverse regional, national, or
international economic conditions, adverse capital market
conditions and adverse political developments; (v) shutdowns or
interruptions at Buckeye’s pipeline, terminalling, storage and
processing assets or at the source points for the products Buckeye
transports, stores or sells; (vi) unanticipated capital
expenditures in connection with the construction, repair or
replacement of Buckeye’s assets; (vii) volatility in the price of
liquid petroleum products; (viii) nonpayment or nonperformance by
Buckeye’s customers; (ix) Buckeye’s ability to integrate acquired
assets with its existing assets and to realize anticipated cost
savings and other efficiencies and benefits; (x) Buckeye’s ability
to successfully complete its organic growth projects and to realize
the anticipated financial benefits; (xi) the risk that the proposed
merger with Hercules Intermediate Holdings LLC may not be completed
in a timely manner or at all; (xii) Buckeye’s failure to receive,
on a timely basis or otherwise, the required approval of the
proposed merger with Hercules Intermediate Holdings LLC by
Buckeye’s Unitholders; (xiii) the possibility that competing offers
or acquisition proposals for Buckeye will be made; (xiv) the
possibility that any or all of the various conditions to the
consummation of the merger may not be satisfied or waived,
including the failure to receive any required regulatory approvals
from any applicable governmental entities (or any conditions,
limitations or restrictions placed on such approvals); (xv) the
occurrence of any event, change or other circumstance that could
give rise to the termination of the Agreement and Plan of Merger
dated May 10, 2019, between Hercules Intermediate Holdings
LLC, Hercules Merger Sub LLC, Buckeye, Buckeye Pipe Line Services
Company and Buckeye GP LLC (the “Merger Agreement”), including in
circumstances which would require Buckeye to pay a termination fee
or other expenses; (xvi) the effect of the announcement or pendency
of the transactions contemplated by the Merger Agreement on
Buckeye’s ability to retain and hire key personnel, its ability to
maintain relationships with its customers, suppliers and others
with whom it does business, or its operating results and business
generally; (xvii) risks related to diverting management’s attention
from Buckeye’s ongoing business operations; (xviii) the risk that
Unitholder litigation in connection with the transactions
contemplated by the Merger Agreement may result in significant
costs to defend or resolve; (xix) the possibility that long-term
financing for the proposed acquisition may not be available on
favorable terms, or at all; and (xx) the cautionary discussion of
risks and uncertainties detailed in Part I, Item 1A, “Risk Factors”
and Part II, Item 7, “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” of Buckeye’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2018 (as
filed with the SEC on February 15, 2019) and other risk factors
identified herein or from time to time in Buckeye’s periodic
filings with the SEC. These factors are not necessarily all of the
important factors that could cause actual results to differ
materially from those expressed in any of Buckeye’s forward-looking
statements. Other known or unpredictable factors could also have
material adverse effects on future results. Consequently, all of
the forward-looking statements made in this communication are
qualified by these cautionary statements, and Buckeye cannot assure
you that actual results or developments that it anticipates will be
realized or, even if substantially realized, will have the expected
consequences to or effect on Buckeye or its business or
operations.
The forward-looking statements contained in this communication
speak only as of the date hereof. Although the expectations in the
forward-looking statements are based on Buckeye’s current beliefs
and expectations, caution should be taken not to place undue
reliance on any such forward-looking statements because such
statements speak only as of the date hereof. Except as required by
federal and state securities laws, Buckeye undertakes no obligation
to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or any other
reason. All forward-looking statements attributable to Buckeye or
any person acting on Buckeye’s behalf are expressly qualified in
their entirety by the cautionary statements contained or referred
to in this communication and in Buckeye’s future periodic reports
filed with the SEC. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in this
communication may not occur.
For media queries, please contact:
Buckeye Partners, L.P.Kevin Goodwin
Vice President and
Treasurer+1 (800) 422 2825
irelations@buckeye.com
|
Jonathan Doorley / Mark PalmerBrunswick Group+1 (212) 333 3810 / +1
(713) 408 7788jdoorley@brunswickgroup.com |
IFM InvestorsKristin ColeProsek Partners+1 310 652
1411Pro-ifm@prosek.com |
|
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