8-KMaterial Agreements

Energy Transfer LP 8-K Report, Material Agreement (Jun 29, 2006)

Filed June 29, 2006For Securities:ETET-PI

Summary

Energy Transfer Equity, L.P. (ET) announced on June 29, 2006, its entry into a material definitive agreement to purchase approximately 9.64 million common units from Kellen Holdings, LLC for an aggregate price of about $237.5 million. This transaction is expected to close by mid-July 2006, subject to certain conditions. Kellen Holdings, an early investor from a 2002 private equity investment, is selling these units as part of its investment strategy to capitalize on liquidity opportunities following ET's initial public offering in February 2006. Importantly, Kellen Holdings will retain its investment in a privately held affiliate, Energy Transfer Investments, L.P. The waiver of Kellen Holdings' lock-up agreement, specifically for this transaction, was granted by the underwriters of ET's IPO.

Key Highlights

  • 1Energy Transfer Equity (ET) to acquire 9,642,757 common units from Kellen Holdings, LLC.
  • 2Aggregate purchase price for the units is approximately $237.5 million.
  • 3Transaction is subject to closing conditions and expected to close by mid-July 2006.
  • 4Kellen Holdings is a significant early investor in ET.
  • 5Kellen Holdings is selling to realize investment returns and capitalize on liquidity post-IPO.
  • 6Kellen Holdings will retain its investment in Energy Transfer Investments, L.P.
  • 7Underwriters have waived lock-up provisions for Kellen Holdings specifically for this sale.

Frequently Asked Questions

This 8-K filing reports on a material definitive agreement where Energy Transfer Equity, L.P. (ET) will purchase a significant block of its own common units from an early investor, Kellen Holdings, LLC.

Kellen Holdings is selling its units as part of its investment strategy to take advantage of a liquidity opportunity after ET's initial public offering in February 2006, having met its internal investment return targets. This does not affect their investment in Energy Transfer Investments, L.P.

Yes, by purchasing its own units back from Kellen Holdings, ET will effectively reduce its outstanding common units. This is often referred to as a unit buyback and can potentially impact earnings per unit.

The purchase is subject to certain closing conditions and is expected to be completed by mid-July 2006. Additionally, the underwriters of ET's IPO have agreed to waive the lock-up agreement for Kellen Holdings specifically for this transaction.