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Targa Resources Corp. 8-K Report, Material Agreement (Oct 20, 2014)

Filed October 20, 2014For Securities:TRGP

Summary

Targa Resources Corp. (TRC) announced on October 13, 2014, that it has entered into definitive merger agreements to acquire both Atlas Energy, L.P. (ATLS) and Atlas Pipeline Partners, L.P. (APL). The transaction involves a two-pronged approach: TRC will merge with ATLS, while Targa Resources Partners LP (TRP), a subsidiary of TRC, will merge with APL. This dual acquisition is expected to significantly expand Targa Resources' footprint and operational capabilities in the midstream energy sector. The proposed transactions include a spin-off of certain ATLS assets into a new entity, New Atlas, which will then be distributed to ATLS unitholders immediately prior to the merger. TRC will acquire ATLS in a cash and stock transaction, with ATLS unitholders receiving 0.1809 shares of TRC common stock and $9.12 in cash per unit. Concurrently, TRP will acquire APL in a unit and cash transaction, with APL unitholders receiving 0.5846 TRP common units and $1.26 in cash per unit. The acquisitions are subject to customary closing conditions, including regulatory approvals and unitholder votes.

Key Highlights

  • 1Targa Resources Corp. (TRC) to acquire Atlas Energy, L.P. (ATLS) and Atlas Pipeline Partners, L.P. (APL) through separate merger agreements.
  • 2The acquisition of ATLS by TRC will be a mix of cash ($9.12 per unit) and TRC stock (0.1809 shares per unit).
  • 3The acquisition of APL by Targa Resources Partners LP (TRP) will be a mix of cash ($1.26 per unit) and TRP units (0.5846 units per unit).
  • 4ATLS will undergo a separation and distribution of its 'Atlas Pipeline Partners' segment assets into a new entity (New Atlas) prior to the merger with TRC.
  • 5The transactions are cross-conditioned, meaning all mergers must occur substantially concurrently.
  • 6Key personnel from ATLS and APL have entered into non-competition, non-solicitation, and voting agreements to support the transactions.
  • 7The completion of the mergers is subject to regulatory approvals (including HSR Act waiting period) and unitholder approvals from both ATLS and APL.

Frequently Asked Questions

The acquisitions of ATLS and APL by Targa Resources and its partnership TRP, respectively, are intended to significantly expand Targa's midstream infrastructure and operations. The combined entity aims to enhance its market position, extend its reach into new areas, and potentially create operational synergies and cost efficiencies.

Targa Resources Corp. (TRC) will merge with Atlas Energy, L.P. (ATLS). Prior to the merger, ATLS will separate its 'Atlas Pipeline Partners' segment assets into a new entity (New Atlas) and distribute it to ATLS unitholders. ATLS unitholders will receive 0.1809 shares of TRC common stock and $9.12 in cash for each ATLS common unit.

Targa Resources Partners LP (TRP) will merge with Atlas Pipeline Partners, L.P. (APL). APL unitholders will receive 0.5846 TRP common units and $1.26 in cash for each APL common unit. This transaction is being executed concurrently with the ATLS merger.

The completion of both mergers is subject to several conditions, including approval from the unitholders of ATLS and APL, expiration of waiting periods under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act, the consummation of the Distribution of New Atlas by ATLS, and the fulfillment of customary representations and warranties and covenants by all parties involved.