Launches New Website,
MaximizingValueforMMPunitholders.com,
Outlining Benefits of the Transaction and Tax Considerations for
Magellan Unitholders
Urges Unitholders to Vote "FOR" the Pending
Merger
TULSA,
Okla., July 25, 2023 /PRNewswire/ -- Magellan
Midstream Partners, L.P. (NYSE: MMP) ("Magellan") today announced
the filing of a definitive proxy statement with the U.S. Securities
and Exchange Commission in connection with our pending merger with
ONEOK, Inc. (NYSE: OKE) ("ONEOK"). Magellan also launched a
website, MaximizingValueforMMPunitholders.com, which reviews the
benefits of the merger, outlines certain tax considerations,
provides voting instructions for unitholders and shares
perspectives on the transaction from third parties.
The special meeting of unitholders will be held virtually on
Sept. 21, 2023 at 10:00 a.m. Central. Magellan unitholders of
record at the close of business on July 24,
2023 are entitled to vote at or in advance of the special
meeting. The Magellan board of directors unanimously recommends
that Magellan unitholders vote "FOR" the proposals related to
Magellan's merger with ONEOK.
Magellan unitholders are encouraged to vote and submit proxies
in advance of the special meeting and will have until 11:59 p.m. Eastern Time on Sept. 20, 2023 to do so. Unitholders will be
receiving proxy cards or other instructions regarding how to vote
on the transaction during the course of the next few days.
"Magellan Midstream Partners is proud of our long history of
delivering industry-leading returns for our investors, exceptional
services for our customers and rewarding careers for Magellan
employees," said Aaron Milford,
Magellan's chief executive officer. "We are confident that the
pending merger with ONEOK is the best path forward for Magellan,
and that the transaction is in the best interests of all MMP
unitholders."
Milford continued, "In order to receive full value for your
units through the completion of the pending transaction, we are
asking all Magellan unitholders to vote 'FOR' the merger-related
proposals by following the instructions on the WHITE proxy
card."
Magellan's #1 job is maximizing value for our unitholders. We
believe this transaction does that and here's why:
Combination captures full value for MMP units that is
significantly greater than Magellan would expect to achieve on a
standalone basis
- 0.667 shares of OKE + $25.00 cash
per MMP unit, representing $67.50 or
a 22% premium1
- Premium reflects robust outlook for Magellan's business not
appreciated by the market
- Cash portion of consideration provides immediate proceeds at
fixed value (37% of total)1
- Magellan unitholders to own ~23% of a stronger, more resilient
combined company
Combined company will have stronger growth prospects, be more
resilient and deliver greater value, including after
considering taxes
- Creates combined company with greater growth potential, asset
diversity and scale, as well as $200-$400+ million of annual synergies
expected
- Mitigates risks associated with continuing to execute
standalone plan
Attractive timing from a tax perspective as long-tenured
unitholders are approaching a sharp increase in annual taxes
owed
- Transaction does not create new taxes except those resulting
from the premium unitholders are receiving
- Annual taxes owed by investors are estimated to increase by
>100% for long-tenured holders to ~60% of distributions within a
few years
As part of ONEOK, Magellan's assets will continue to play an
essential role in the daily lives of Americans for decades to
come.
Competitive advantages of combined company
- Diversified and complementary expertise and assets create
greater growth opportunities, combining Magellan's refined products
and crude oil businesses with ONEOK's NGL and natural gas focused
businesses
- Strong free cash flow and a commitment to capital returns and
dividends
- Significant opportunity for operational and commercial
synergies
- Platform for greater capital deployment at attractive
returns
- Enhanced resilience across industry cycles
- S&P 500 Index inclusion, providing improved shareholder
liquidity
- Strong balance sheet and financial flexibility
Risks if Magellan remains a standalone partnership
- Maturity of core refined products business creates challenges
to growing significant existing market position
- Risk of energy transition impacting demand more than
expected
- Re-contracting / pricing risks around excess crude oil
infrastructure capacity
- Increasingly limited organic growth opportunities at acceptable
risk adjusted returns
- Challenges with diversifying through acquisitions at reasonable
price points
- Sector-leading capital discipline adds value but also lowers
unitholder allocable depreciation and therefore increases
unitholder taxes
- Equity repurchases increase value per unit but also lead to
higher income per unit, and thereby raise unitholder taxes
The Magellan board of directors unanimously recommends that
Magellan unitholders vote "FOR" the proposals related to Magellan's
merger with ONEOK, using the WHITE proxy card or WHITE voting
instruction form.
Magellan unitholders
who need assistance in completing the proxy card, need additional
copies of the proxy materials or have questions regarding the
upcoming special meeting should contact Magellan's proxy
solicitors:
|
|
Morrow Sodali,
LLC
|
MacKenzie Partners,
Inc.
|
Phone: (800) 662-5200
or (203) 658-9400
|
Phone: (800) 322-2885
or (212) 929-5500
|
Email: MMP@info.morrowsodali.com
|
Email:
proxy@mackenziepartners.com
|
About Magellan Midstream Partners, L.P.
Magellan
Midstream Partners, L.P. (NYSE: MMP) is a publicly traded
partnership that primarily transports, stores and distributes
refined petroleum products and crude oil. Magellan owns the longest
refined petroleum products pipeline system in the country, with
access to nearly 50% of the nation's refining capacity, and can
store more than 100 million barrels of petroleum products such as
gasoline, diesel fuel and crude oil. More information is available
at www.magellanlp.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This communication contains "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements, other than statements of historical fact,
included in this communication that address activities, events or
developments that ONEOK or Magellan expects, believes or
anticipates will or may occur in the future are forward-looking
statements. Words such as "estimate," "project," "predict,"
"believe," "expect," "anticipate," "potential," "create," "intend,"
"could," "would," "may," "plan," "will," "guidance," "look,"
"goal," "future," "build," "focus," "continue," "strive," "allow"
or the negative of such terms or other variations thereof and words
and terms of similar substance used in connection with any
discussion of future plans, actions, or events identify
forward-looking statements. However, the absence of these words
does not mean that the statements are not forward-looking. These
forward-looking statements include, but are not limited to,
statements regarding the proposed transaction between ONEOK and
Magellan (the "Proposed Transaction"), the expected closing of the
Proposed Transaction and the timing thereof and as adjusted
descriptions of the post-transaction company and its operations,
strategies and plans, integration, debt levels and leverage ratio,
capital expenditures, cash flows and anticipated uses thereof,
synergies, opportunities and anticipated future performance,
including maintaining current ONEOK management, enhancements to
investment-grade credit profile, an expected accretion to earnings
and free cash flow, dividend payments and potential share
repurchases, increase in value of tax attributes and expected
impact on EBITDA. Information adjusted for the Proposed Transaction
should not be considered a forecast of future results. There are a
number of risks and uncertainties that could cause actual results
to differ materially from the forward-looking statements included
in this communication. These include the risk that ONEOK's and
Magellan's businesses will not be integrated successfully; the risk
that cost savings, synergies and growth from the Proposed
Transaction may not be fully realized or may take longer to realize
than expected; the risk that the credit ratings of the combined
company or its subsidiaries may be different from what the
companies expect; the possibility that shareholders of ONEOK may
not approve the issuance of new shares of ONEOK common stock in the
Proposed Transaction or that unitholders of Magellan may not
approve the Proposed Transaction; the risk that a condition to
closing of the Proposed Transaction may not be satisfied, that
either party may terminate the merger agreement or that the closing
of the Proposed Transaction might be delayed or not occur at all;
potential adverse reactions or changes to business or employee
relationships, including those resulting from the announcement or
completion of the Proposed Transaction; the occurrence of any other
event, change or other circumstances that could give rise to the
termination of the merger agreement relating to the Proposed
Transaction; the risk that ONEOK may not be able to secure the debt
financing necessary to fund the cash consideration required for the
Proposed Transaction; the risk that changes in ONEOK's capital
structure and governance could have adverse effects on the market
value of its securities; the ability of ONEOK and Magellan to
retain customers and retain and hire key personnel and maintain
relationships with their suppliers and customers and on ONEOK's and
Magellan's operating results and business generally; the risk the
Proposed Transaction could distract management from ongoing
business operations or cause ONEOK and/or Magellan to incur
substantial costs; the risk of any litigation relating to the
Proposed Transaction; the risk that ONEOK may be unable to reduce
expenses or access financing or liquidity; the impact of the
COVID-19 pandemic, any related economic downturn and any related
substantial decline in commodity prices; the risk of changes in
governmental regulations or enforcement practices, especially with
respect to environmental, health and safety matters; and other
important factors that could cause actual results to differ
materially from those projected. All such factors are difficult to
predict and are beyond ONEOK's or Magellan's control, including
those detailed in the joint proxy statement/prospectus (as defined
below). All forward-looking statements are based on assumptions
that ONEOK and Magellan believe to be reasonable but that may not
prove to be accurate. Any forward-looking statement speaks only as
of the date on which such statement is made, and neither ONEOK nor
Magellan undertakes any obligation to correct or update any
forward-looking statement, whether as a result of new information,
future events or otherwise, except as required by applicable law.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date
hereof.
IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the Proposed Transaction, on July 25, 2023, ONEOK and Magellan each filed with
the SEC a definitive joint proxy statement/prospectus (the "joint
proxy statement/prospectus"), and each party will file other
documents regarding the Proposed Transaction with the SEC. Each of
ONEOK and Magellan commenced mailing copies of the joint proxy
statement/prospectus to shareholders of ONEOK and unitholders of
Magellan, respectively, on or about July 25,
2023. This communication is not a substitute for the joint
proxy statement/prospectus or for any other document that ONEOK or
Magellan has filed or may file in the future with the SEC in
connection with the Proposed Transaction. INVESTORS AND SECURITY
HOLDERS OF ONEOK AND MAGELLAN ARE URGED TO CAREFULLY AND THOROUGHLY
READ THE JOINT PROXY STATEMENT/PROSPECTUS, INCLUDING ALL AMENDMENTS
AND SUPPLEMENTS THERETO, AND OTHER RELEVANT DOCUMENTS FILED OR THAT
WILL BE FILED BY ONEOK AND MAGELLAN WITH THE SEC BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT ONEOK AND MAGELLAN, THE
PROPOSED TRANSACTION, THE RISKS RELATED THERETO AND RELATED
MATTERS.
Investors can obtain free copies of the joint proxy
statement/prospectus and other relevant documents filed by ONEOK
and Magellan with the SEC through the website maintained by the SEC
at www.sec.gov. Copies of documents filed with the SEC by ONEOK,
including the joint proxy statement/prospectus, are available free
of charge from ONEOK's website at www.oneok.com under the
"Investors" tab. Copies of documents filed with the SEC by
Magellan, including the joint proxy statement/prospectus, are
available free of charge from Magellan's website at
www.magellanlp.com under the "Investors" tab.
Contact:
|
Investors:
|
Media:
|
|
Paula
Farrell
|
Bruce Heine
|
|
(918)
574-7650
|
(918)
574-7010
|
|
paula.farrell@magellanlp.com
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bruce.heine@magellanlp.com
|
1 Based on the closing OKE share and MMP unit
prices on May 12, 2023, the final
trading day prior to the announcement of the transaction
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SOURCE Magellan Midstream Partners, L.P.