Marathon Petroleum Corp. increases cash consideration for MPLX/MarkWest merger
(Thomson Reuters ONE) -
* One-time cash payment from MPC raised to $1.075 billion from $675 million
* Total cash consideration of ~$5.21 per unit substantially enhances value to
MarkWest unitholders
* MarkWest board and executive management affirm their support for the
transaction and its revised terms
* Supplemental proxy cards being mailed to unitholders
* Special unitholder meeting scheduled for Dec. 1, 2015
FINDLAY, Ohio, and DENVER, Nov. 10, 2015 - MPLX LP (NYSE: MPLX) and MarkWest
Energy Partners, L.P. (NYSE: MWE) (MarkWest) today announced that in connection
with the merger of MPLX and MarkWest, MPLX has agreed to increase the amount of
the cash consideration payable to MarkWest common unitholders by $400 million,
from $675 million to $1.075 billion. Under the revised terms of the merger
agreement, MarkWest common unitholders will receive 1.09 MPLX common units plus
a one-time cash payment of approximately $5.21 per MarkWest common unit, for a
total consideration of approximately $52.93 per MarkWest common unit, based on
fully diluted units currently outstanding and the closing price of MPLX's common
units on Nov. 10, 2015. The increase in cash merger consideration is being
contributed to MPLX by its sponsor, Marathon Petroleum Corporation (NYSE: MPC),
under which no new equity units will be issued to MPC. In addition, as part of
the original transaction, MPC will contribute approximately $225 million, based
on the price of MPLX's common units on Nov. 10, 2015, to maintain its 2 percent
general partner interest in MPLX. These proceeds will be retained by the
partnership to support its growth.
All other terms of the merger agreement announced on July 13, 2015, remain the
same. The merger is recommended by the boards of directors of MPC, MPLX and
MarkWest, and the executive management of both partnerships also strongly
support the transaction and its revised terms.
The proposed transaction will combine MarkWest, the second-largest processor of
natural gas in the United States and largest processor and fractionator in the
Marcellus and Utica shale plays, with MPLX, a rapidly growing crude oil and
refined products logistics partnership sponsored by MPC. The combination will
create one of the largest master limited partnerships (MLPs) and is expected to
generate a mid-20 percent compound annual distribution growth rate through 2019.
"The enhancement to the terms of our agreement reflects the commitment of MPLX
and its sponsor, MPC, to the combination with MarkWest and our conviction that
the transaction will create significant benefits for the unitholders, customers
and employees of both partnerships," said Gary R. Heminger, MPLX chairman and
chief executive officer. "This increase substantially enhances the transaction
value for MarkWest unitholders, who will not only benefit from significant
distribution growth, but also a substantially lower equity yield, investment-
grade debt funding costs, enhanced access to capital and liquidity, and a strong
general partner prepared to provide support and financial flexibility."
Even in a challenging environment of lower MLP valuations and higher yields, and
in continued support of the combination, MPLX recently affirmed its guidance
that creates a mid-20-percent compound annual distribution growth profile
through 2019, including a 25 percent distribution growth rate in 2016. Heminger
noted that MPC, as the sponsor and general partner, has extensive options
available to support the growth profile of the combined partnership, including
dropping down the large and growing $1.6 billion inventory of MLP-qualifying
earnings before interest, taxes, depreciation and amortization.
"The increased cash consideration and ownership of a higher growth MLP with a
strong sponsor provides even more compelling value for MarkWest unitholders, who
will own approximately 73 percent of the combined partnership when the
transaction is completed," said Heminger. "Both partnerships' unitholders can
share in the strong upside potential of a combined partnership with multiple
operational platforms as well as significant growth and commercial synergy
opportunities. Coupled with MarkWest's $1.5 billion average annual organic
capital growth program over the next five years, our substantial resources and
strong sponsor will support the combined partnership in unlocking an incremental
$6 billion to $9 billion of potential organic growth projects," said Heminger.
"Our Board continues to support the combination with MPLX and recommends that
MarkWest unitholders vote in favor of the merger proposal," said Frank M.
Semple, MarkWest chairman, president and chief executive officer. "The long-term
strategic value of the combination with MPLX and the support from Marathon
Petroleum is compelling. The increased cash contribution of $400 million
substantially enhances the value of the transaction for our unitholders. We are
excited to complete the transaction and continue the important work of
developing critical midstream projects for our producer customers, and
delivering significant unitholder value over the long term."
The transaction is subject to approval by MarkWest unitholders and other
customary closing conditions and, subject to the satisfaction of those
conditions, is expected to close in December 2015. The date of the special
meeting of MarkWest common unitholders is Dec. 1, 2015. MarkWest unitholders of
record as of Oct. 5, 2015, will be entitled to vote on approval of the merger
and the associated proposals.
MarkWest unitholders are urged to vote "FOR" the merger and related matters and
submit their proxy as promptly as possible, either by telephone, via the
internet or by marking, signing and dating the proxy card that was provided to
unitholders along with the proxy statement and prospectus.
MarkWest expects to mail supplemental proxy materials to its unitholders in the
near future.
###
About MPLX LP
MPLX is a fee-based, growth-oriented master limited partnership formed in 2012
by Marathon Petroleum Corporation to own, operate, develop and acquire pipelines
and other midstream assets related to the transportation and storage of crude
oil, refined products and other hydrocarbon-based products. Headquartered in
Findlay, Ohio, MPLX's assets consist of a 99.5 percent equity interest in a
network of common carrier crude oil and products pipeline assets located in the
Midwest and Gulf Coast regions of the United States and a 100 percent interest
in a butane storage cavern located in West Virginia with approximately 1 million
barrels of natural gas liquids storage capacity.
About MarkWest Energy Partners
MarkWest Energy Partners, L.P. is a master limited partnership that owns and
operates midstream service businesses. MarkWest has a leading presence in many
natural gas resource plays including the Marcellus Shale, Utica Shale,
Huron/Berea Shale, Haynesville Shale, Woodford Shale and Granite Wash formation.
MPLX Investor Relations Contacts:
Geri Ewing (419) 421-2071
Teresa Homan (419) 421-2965
MPLX Media Contacts:
Chuck Rice (419) 421-2521
Jamal Kheiry (419) 421-3312
MarkWest Investor Relations and Media Contact:
Joshua Hallenbeck (866) 858-0482
This press release contains forward-looking statements within the meaning of
federal securities laws regarding MPLX LP ("MPLX"), Marathon Petroleum
Corporation ("MPC"), and MarkWest Energy Partners, L.P. ("MWE"),. These forward-
looking statements relate to, among other things, expectations, estimates and
projections concerning the business and operations of MPLX, MPC, and MWE . You
can identify forward-looking statements by words such as "anticipate,"
"believe," "estimate," "objective," "expect," "forecast," "guidance," "imply,"
"plan," "project," "potential," "could," "may," "should," "would," "will" or
other similar expressions that convey the uncertainty of future events or
outcomes. Such forward-looking statements are not guarantees of future
performance and are subject to risks, uncertainties and other factors, some of
which are beyond the companies' control and are difficult to predict. In
addition to other factors described herein that could cause MPLX's or MWE's
actual results to differ materially from those implied in these forward-looking
statements, negative capital market conditions, including a persistence or
increase of the current yield on common units, which is higher than historical
yields, could adversely affect MPLX's ability to meet its distribution growth
guidance, particularly with respect to the later years of such guidance. Factors
that could cause MPLX's or MWE's actual results to differ materially from those
implied in the forward-looking statements include: the ability to complete the
proposed merger of MPLX and MWE on anticipated terms and timetable; the ability
to obtain approval of the transaction by the unitholders of MWE and satisfy
other conditions to the closing of the transaction contemplated by the merger
agreement; risk that the synergies from the MPLX/MWE transaction may not be
fully realized or may take longer to realize than expected; disruption from the
MPLX/MWE transaction making it more difficult to maintain relationships with
customers, employees or suppliers; risks relating to any unforeseen liabilities
of MWE or MPLX, as applicable; the adequacy of MPLX's and MWE's respective
capital resources and liquidity, including, but not limited to, availability of
sufficient cash flow to pay distributions, and the ability to successfully
execute their business plans and implement their growth strategies; the timing
and extent of changes in commodity prices and demand for crude oil, refined
products, feedstocks or other hydrocarbon-based products; volatility in and/or
degradation of market and industry conditions; completion of pipeline capacity
by competitors; disruptions due to equipment interruption or failure, including
electrical shortages and power grid failures; the suspension, reduction or
termination of MPC's obligations under MPLX's commercial agreements; each
company's ability to successfully implement its growth plan, whether through
organic growth or acquisitions; modifications to earnings and distribution
growth objectives; federal and state environmental, economic, health and safety,
energy and other policies and regulations; changes to MPLX's capital budget;
other risk factors inherent to MPLX or MWE's industry; and the factors set forth
under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the
year ended Dec. 31, 2014, filed with the Securities and Exchange Commission
(SEC); and the factors set forth under the heading "Risk Factors" in MWE's
Annual Report on Form 10-K for the year ended Dec. 31, 2014, and Quarterly
Report on Form 10-Q for the quarter ended September 30, 2015, filed with the
SEC. These risks, as well as other risks associated with MPLX, MWE and the
proposed transaction are also more fully discussed in the joint proxy statement
and prospectus included in the registration statement on Form S-4 filed by MPLX
and declared effective by the SEC on October 29, 2015. Factors that could cause
MPC's actual results to differ materially from those implied in the forward-
looking statements include: risks described above relating to the MPLX/MWE
proposed merger; changes to the expected construction costs and timing of
pipeline projects; volatility in and/or degradation of market and industry
conditions; the availability and pricing of crude oil and other feedstocks;
slower growth in domestic and Canadian crude supply; an easing or lifting of the
U.S. crude oil export ban; completion of pipeline capacity to areas outside the
U.S. Midwest; consumer demand for refined products; transportation logistics;
the reliability of processing units and other equipment; MPC's ability to
successfully implement growth opportunities; modifications to MPLX earnings and
distribution growth objectives; federal and state environmental, economic,
health and safety, energy and other policies and regulations; MPC's ability to
successfully integrate the acquired Hess retail operations and achieve the
strategic and other expected objectives relating to the acquisition; changes to
MPC's capital budget; other risk factors inherent to MPC's industry; and the
factors set forth under the heading "Risk Factors" in MPC's Annual Report on
Form 10-K for the year ended Dec. 31, 2014, filed with SEC. In addition, the
forward-looking statements included herein could be affected by general domestic
and international economic and political conditions. Unpredictable or unknown
factors not discussed here, in MPLX's Form 10-K, in MPC's Form 10-K, or in MWE's
Form 10-K and Form 10-Qs could also have material adverse effects on forward-
looking statements. Copies of MPLX's Form 10-K are available on the SEC website,
MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations
office. Copies of MPC's Form 10-K are available on the SEC website, MPC's
website at http://ir.marathonpetroleum.com or by contacting MPC's Investor
Relations office. Copies of MWE's Form 10-K and Form 10-Qs are available on the
SEC website, MWE's website at http://investor.markwest.com or by contacting
MWE's Investor Relations office.
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in respect of the
proposed acquisition of MWE by MPLX. In connection with the proposed
acquisition, MWE and MPLX have filed relevant materials with the SEC, including
MPLX's registration statement on Form S-4 that includes a definitive joint proxy
statement and a prospectus and was declared effective by the SEC on October
29, 2015. Investors and security holders are urged to read all relevant
documents filed with the SEC, including the definitive joint proxy statement and
prospectus, because they contain important information about the proposed
transaction. Investors and security holders are able to obtain the documents
free of charge at the SEC's website, http://www.sec.gov, or for free from MPLX
LP at its website, http://ir.mplx.com, or in writing at 200 E. Hardin Street,
Findlay, Ohio 45840, Attention: Corporate Secretary, or for free from MWE by
contacting Investor Relations by phone at 1-(866) 858-0482 or by email at
investorrelations(at)markwest.com.
Participants in the Solicitation
This communication is not a solicitation of a proxy from any investor or
securityholder. However MPLX and MWE and their respective directors and
executive officers and certain employees may be deemed to be participants in the
solicitation of proxies from the holders of MWE common units with respect to the
proposed transaction. Information about MPLX's directors and executive officers
is available in MPLX's Annual Report on Form 10-K filed with the SEC on February
27, 2015 and MPLX's current report on Form 8-K, as filed with the SEC on March
9, 2015. Information about MWE's directors and executive officers is set forth
in the proxy statement for MWE's 2015 Annual Meeting of Common Unitholders,
which was filed with the SEC on April 23, 2015 and MWE's current reports on Form
8-K, as filed with the SEC on May 5, 2015, May 19, 2015 and June 8, 2015, and in
the definitive joint proxy statement filed by MPLX, which was declared effective
by the SEC on October 29, 2015. To the extent holdings of MWE securities have
changed since the amounts contained in the definitive joint proxy statement
filed by MPLX, which was declared effective by the SEC on October 29, 2015, such
changes have been or will be reflected on Statements of Change in Ownership on
Form 4 filed with the SEC. Investors may obtain additional information regarding
the interest of such participants by reading the definitive joint proxy
statement and prospectus regarding the acquisition. These documents may be
obtained free of charge from the SEC's website http://www.sec.gov, or from MWE
and MPLX using the contact information above.
Non-Solicitation
This communication shall not constitute an offer to sell or the solicitation of
an offer to sell or the solicitation of an offer to buy any securities, nor
shall there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. No offer of securities shall
be made except by means of a prospectus meeting the requirements of Section 10
of the Securities Act of 1933, as amended.
MPC Increases Cash Consideration:
http://hugin.info/155038/R/1965997/717898.pdf
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: MPLX LP via GlobeNewswire
[HUG#1965997]
Datum: 10.11.2015 - 22:58 Uhr
Sprache: Deutsch
News-ID 433649
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