What is the total value of the transaction?

The filing does not explicitly state the total transaction value. However, it details the per-share consideration for SemGroup shareholders, which consists of $6.80 in cash and 0.7275 ET common units for each SemGroup common share. The overall value would depend on the total number of SemGroup shares outstanding and the prevailing market price of ET common units at closing.

What happens to SemGroup's preferred stock in the merger?

SemGroup's Series A Cumulative Perpetual Convertible Preferred Stock will be handled either by conversion into SemGroup common stock (and then receiving the merger consideration), exchange for a 'Substantially Equivalent Security,' or redemption by SemGroup for cash at 101% of its Liquidation Preference. Per the Support Agreement, holders of a majority of the preferred stock have agreed to elect the redemption option, and the Certificate of Designations will be amended to facilitate this cash redemption at closing.

Are there any termination fees associated with this agreement?

Yes, if the Merger Agreement is terminated under certain circumstances, SemGroup may be required to reimburse ET's expenses up to $27.25 million or pay ET a termination fee of $54.5 million.

What are the key conditions for the merger to close?

Key conditions include the adoption of the Merger Agreement by SemGroup's shareholders (both common and preferred, voting as a single class), the absence of prohibitive court orders or injunctions, expiration of the Hart-Scott-Rodino (HSR) Act waiting period, effectiveness of ET's Form S-4 registration statement for the new common units, accuracy of representations and warranties, listing authorization for ET common units on the NYSE, and material compliance with covenants by both parties.

ET/ET-PI 8-K: Material Agreements

Summary

Energy Transfer LP (ET) announced on September 15, 2019, its entry into a definitive Agreement and Plan of Merger to acquire SemGroup Corporation. This strategic acquisition will be executed through ET's wholly owned subsidiary, Nautilus Merger Sub LLC. The transaction is structured as a merger where SemGroup will survive as a subsidiary of ET. This move is expected to enhance ET's scale and asset footprint within the energy infrastructure sector. Under the terms of the merger, SemGroup shareholders will receive a combination of cash and ET common units. Specifically, each SemGroup common share will be converted into $6.80 in cash and 0.7275 ET common units. The agreement includes provisions for the treatment of SemGroup's preferred stock and equity awards, with ET assuming certain outstanding awards and converting them into ET common units. The transaction is subject to customary closing conditions, including regulatory approvals and SemGroup shareholder adoption, with a target completion date to be specified but with provisions to extend up to September 30, 2020, if HSR clearance is pending.

Key Highlights

1Energy Transfer LP (ET) has entered into a definitive Agreement and Plan of Merger to acquire SemGroup Corporation.
2The acquisition will be structured as a merger where SemGroup becomes a subsidiary of ET.
3SemGroup shareholders will receive $6.80 in cash and 0.7275 ET common units per SemGroup common share.
4ET will assume and convert outstanding SemGroup equity awards (RSUs, restricted stock) into ET common units.
5SemGroup preferred stock will be redeemed for cash at 101% of its liquidation preference, as elected by holders.
6The merger agreement includes a 'no-shop' clause for SemGroup, with provisions allowing for superior unsolicited proposals under certain conditions.
7Closing conditions include SemGroup shareholder approval, HSR Act clearance, and the effectiveness of ET's Form S-4 registration statement for the new units.

Energy Transfer LP 8-K Report, Material Agreement (Sep 16, 2019)

Summary

Key Highlights

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