8-KMaterial AgreementsExhibits & Filings

Energy Transfer LP 8-K Report, Material Agreement (Jun 20, 2011)

Filed June 20, 2011For Securities:ETET-PI

Summary

This 8-K filing from Energy Transfer LP (ET) announces a material definitive agreement, specifically an Agreement and Plan of Merger with Southern Union Company (SUG). Energy Transfer Equity, L.P. will acquire SUG through its subsidiary, Sigma Acquisition Corporation. The transaction involves SUG merging into Merger Sub, with SUG surviving as a wholly-owned subsidiary of Energy Transfer. The approved merger consideration for SUG stockholders is one newly created Series B Unit of Energy Transfer Equity for each share of SUG common stock. These Series B Units are designed to be convertible and have specific distribution preferences over common units. The filing also details the treatment of SUG's equity-based awards, including the vesting and conversion of stock options and restricted stock units into cash payments or Series B Units. Furthermore, key executives of SUG, George L. Lindemann and Eric D. Herschmann, have entered into consulting and non-competition agreements with Energy Transfer, contingent on the merger's closing, which include substantial annual fees for five years post-merger. Significant stockholders of SUG have also entered into a support agreement to vote in favor of the merger.

Key Highlights

  • 1Energy Transfer Equity, L.P. enters into a merger agreement to acquire Southern Union Company (SUG).
  • 2SUG stockholders will receive one newly created Series B Unit of Energy Transfer Equity for each share of SUG common stock.
  • 3Series B Units offer defined quarterly cash distributions, senior to common units, and are convertible into common units.
  • 4SUG's stock options and restricted stock units will be vested and converted into cash payments or Series B Units.
  • 5Key SUG executives (Lindemann and Herschmann) to receive significant consulting and non-competition fees post-merger.
  • 6Certain SUG stockholders representing approximately 13.43% of voting shares have agreed to support the merger via a support agreement.
  • 7The merger is subject to various closing conditions, including regulatory approvals and SUG stockholder adoption.

Frequently Asked Questions

This filing announces Energy Transfer Equity, L.P.'s entry into a material definitive agreement to merge with Southern Union Company (SUG). It outlines the terms of the merger, the consideration offered to SUG stockholders, and related agreements.

SUG stockholders will receive one Series B Unit of Energy Transfer Equity for each share of SUG common stock they own. These Series B Units are a new class of convertible securities with specified distribution rights and liquidation preferences.

The Series B Units have an initial liquidation value of $33.00, will receive quarterly cash distributions senior to common units, and are convertible into Energy Transfer common units starting one year after issuance or under specific distribution scenarios. Energy Transfer also has an option to redeem these units.

Yes, key executives George L. Lindemann and Eric D. Herschmann have entered into five-year consulting and non-competition agreements with Energy Transfer, contingent on the merger closing. These agreements include substantial annual fees.

The merger is subject to several conditions, including the adoption of the merger agreement by SUG stockholders, expiration of HSR waiting periods, approval from various regulatory bodies (FERC, state utility commissions, FCC), effectiveness of a registration statement for the Series B Units, listing approval on the NYSE, and the absence of any legal impediments.