8-KMaterial AgreementsOther EventsExhibits & Filings

EQT Corp 8-K Report, Material Agreement (Apr 26, 2018)

Filed April 26, 2018For Securities:EQT

Summary

This Form 8-K filing from EQT Corporation (EQT) on April 26, 2018, details significant midstream asset consolidation and simplification transactions. EQT Midstream Partners, LP (EQM) is set to acquire Rice Midstream Partners LP (RMP) in a merger where RMP common unitholders will receive 0.3319 EQM common units per RMP unit. Concurrently, EQT is selling certain midstream assets, including those related to Rice West Virginia Midstream, Rice Olympus Midstream, and Strike Force Midstream Holdings, to EQM in exchange for EQM common units and $1.15 billion in cash. Additionally, EQGP will acquire EQT's Incentive Distribution Rights (IDRs) in RMP. These strategic moves aim to simplify EQT's midstream structure, enhance operational efficiencies, and potentially unlock value for unitholders through a more streamlined entity. The transactions are subject to customary closing conditions, including unitholder approvals for the RMP merger, regulatory approvals, and financing for the asset sales. EQT has committed to vote its RMP units in favor of the merger. The expected closing timeframe for the merger is the third quarter of 2018, with the asset sales and IDR transaction anticipated in the second quarter of 2018. Investors should note the potential for termination fees if certain conditions are not met and the integration risks associated with combining these entities. The filing also includes forward-looking statements and cautionary notes regarding the uncertainties inherent in these types of transactions.

Key Highlights

  • 1EQT Midstream Partners (EQM) to acquire Rice Midstream Partners (RMP) via merger; RMP unitholders to receive 0.3319 EQM common units.
  • 2EQT selling midstream assets (Rice West Virginia, Rice Olympus, Strike Force Holdings) to EQM for $1.15 billion cash and EQM common units.
  • 3EQGP acquiring EQT's Incentive Distribution Rights (IDRs) in RMP.
  • 4Transactions are designed to simplify EQT's midstream structure and enhance operational integration.
  • 5Merger closing targeted for Q3 2018; asset sales and IDR transaction expected in Q2 2018.
  • 6RMP unitholder approval and other customary closing conditions, including regulatory approvals, are required.
  • 7Termination fees are stipulated under certain circumstances for the merger agreement.

Frequently Asked Questions

The primary purpose is to simplify EQT's midstream structure, consolidate assets under EQM, and improve operational integration and potential synergies. This is achieved through the merger of RMP into EQM, the sale of certain EQT midstream assets to EQM (a 'drop-down'), and the consolidation of IDRs.

RMP common unitholders will receive 0.3319 common units of EQT Midstream Partners, LP (EQM) for each RMP common unit they hold. The RMP IDRs will be canceled as part of the merger.

Key conditions include the approval of the merger by RMP unitholders, listing approval for the EQM common units to be issued, expiration of HSR waiting periods, effectiveness of a Form S-4 registration statement, satisfactory representations and warranties, completion of certain tax opinions, and the simultaneous completion of the 'Drop-Down Transactions' and the 'IDR Transaction'.

EQT expects the merger to close in the third quarter of 2018. The asset sales (Drop-Down Transactions) and the RMP IDR purchase are expected to close in the second quarter of 2018.