US-based energy transmission and production company Dominion Energy has made a proposal to buy all outstanding common units in Dominion Energy Midstream Partners.
Under the terms of the offer, Dominion Energy will issue 0.2468 common shares per Dominion Energy Midstream common unit, valuing each unit at $17.75.
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The proposed acquisition values Dominion Energy Midstream Partners at $2.2bn, Reuters reported.
The company already owns a 15% stake in Dominion Energy Midstream Partners.
Dominion Energy chairman, president and CEO Thomas Farrell said: “Continued weakness in MLP capital markets combined with the prolonged disruption in Dominion Energy Midstream’s (DM) common unit price since the March 15 Federal Energy Regulatory Commission policy revision were key factors that led to this decision.
“Fortunately, Dominion Energy has already successfully completed several steps that will allow us to achieve our earnings and credit objectives despite these challenges.
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By GlobalData“The proposed transaction would provide a premium to recent market trading levels for DM common unit holders and also benefit Dominion Energy shareholders by removing uncertainty as to the future of DM and the potentially negative impact of changes in FERC tax policy to the future cash flows of current DM assets.”
The signing of any definitive agreement for the transaction is subject to review and approval by the boards of directors of both companies.
Completion of the transaction will be linked to the fulfilment of customary closing conditions, including standard regulatory notifications and approvals.
Dominion Energy provides electric generation, transmission and distribution, as well as natural gas storage, transmission, distribution, and import/export services.
The company created Dominion Energy Midstream to develop a portfolio of natural gas terminaling, processing, storage, transportation and related assets.
