8-KMaterial AgreementsExhibits & Filings

Targa Resources Corp. 8-K Report, Material Agreement (Nov 6, 2015)

Filed November 6, 2015For Securities:TRGP

Summary

Targa Resources Corp. (TRC) announced on November 6, 2015, its entry into a definitive Agreement and Plan of Merger with its subsidiary, Targa Resources Partners LP (TRP). The core of this filing details TRC's plan to acquire all outstanding common units of TRP that it does not already own, in an all-stock transaction. This merger will result in TRP continuing as a subsidiary of TRC, effectively simplifying the corporate structure and consolidating ownership. Investors should note the exchange ratio of 0.62 shares of TRC common stock for each TRP common unit. The boards of directors of both TRC and TRP GP have approved the merger, and the TRP GP Conflicts Committee has deemed it fair and in the best interests of TRP unitholders. The transaction is subject to customary closing conditions, including unitholder and stockholder approvals, regulatory clearance (HSR Act), and listing of TRC shares on the NYSE. The filing also outlines termination fees and expenses that could be incurred under specific circumstances, providing transparency on potential deal break conditions.

Key Highlights

  • 1Targa Resources Corp. (TRC) to acquire all outstanding TRP common units not already owned by TRC.
  • 2Merger to be an all-stock transaction with an exchange ratio of 0.62 TRC common shares per TRP common unit.
  • 3TRP will survive the merger as a subsidiary of TRC, simplifying the corporate structure.
  • 4Transaction approved by the boards of directors of TRC and TRP GP, and recommended by the TRP GP Conflicts Committee.
  • 5Key closing conditions include unitholder and stockholder approval, HSR Act clearance, and listing of TRC shares on the NYSE.
  • 6Termination fees and expense reimbursements are defined under specific circumstances for both parties.
  • 7The filing also discusses the treatment of TRP Performance Units and the assumption of the TRP Long-Term Incentive Plan by TRC.

Frequently Asked Questions

This Form 8-K filing announces Targa Resources Corp.'s entry into a material definitive agreement, specifically an Agreement and Plan of Merger, with its subsidiary Targa Resources Partners LP. The main purpose is to disclose the terms of the proposed merger where TRC will acquire the remaining publicly held common units of TRP.

Holders of TRP common units not already owned by TRC will receive 0.62 shares of Targa Resources Corp. (TRC) common stock for each TRP common unit they own, subject to certain exceptions for units held by TRC or its subsidiaries.

The completion of the merger is contingent upon several conditions, including: approval of the merger agreement by TRP unitholders, approval of the TRC share issuance by TRC stockholders, expiration or termination of the waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act, no law or injunction prohibiting the transaction, effectiveness of a registration statement on Form S-4, approval for listing of TRC shares on the NYSE, accuracy of representations and warranties, and material compliance with covenants by both parties.

Yes, the merger agreement outlines termination fees. If terminated under certain circumstances, TRC may be obligated to pay TRP an amount related to a reduction in incentive distribution rights ($96.5 million) or TRP's expenses (up to $10 million). Conversely, if terminated under certain circumstances, TRP may be obligated to pay TRC a termination fee of $96.5 million or TRC's expenses (up to $10 million).