Regency Energy to buy rival PVR Partners in $5.6-bn deal
11 October 2013
US natural gas pipeline operator Regency Energy Partners yesterday agreed to buy rival PVR Partners for $5.6 billion, including debt of $1.8 billion, in a bid to acquire PVR's prolific Marcellus and Utica shale fields.
Under the terms of the deal, PVR unitholders will receive $28.68 per common unit - a 25.7-per cent premium to the closing price of PVR's common units of $22.81 on 9 October.
Holders of PVR common units, Class B units and special units will receive 1.020 common units of Regency for each PVR unit held by them.
PVR unitholders also will receive a one-time cash payment at closing of the merger that is estimated to be about $40 million.
Post closing, the merged company will retain the name Regency, with its headquarters in Dallas.
Regency Energy said that the deal will create a leading gas gathering and processing platform with a scaled presence across North America's premier high-growth unconventional oil and gas plays in Appalachia, West Texas, South Texas, the Mid-Continent and North Louisiana.
The addition of PVR's asset base in Appalachia and the Mid-Continent region to Regency's existing footprint in the Permian Basin, South Texas and North Louisiana will create a diversified, high-growth midstream company with assets in many of the most economic, high-growth unconventional oil and gas plays in North America.
PVR Partners owns and operates a network of natural gas midstream pipelines and processing plants, and owns and manages coal and natural resource properties.
Its midstream assets, located principally in Texas, Oklahoma and Pennsylvania, provide gathering, transportation, compression, processing, dehydration and related services to natural gas producers.
PVR Partners' coal and natural resource properties, located in the Appalachian, Illinois and San Juan basins, are leased to operators in exchange for royalty payments.