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Inergy Holdings, L.P. (NRGP) Message Board

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  • Eric8k Eric8k Aug 9, 2010 11:41 AM Flag

    NRGY to buy NRGP

    Always in the wording and the details.

    1. Under the terms of the merger agreement, NRGP unitholders will receive 0.77 NRGY common units in exchange for each NRGP common unit they own at closing, representing a premium to NRGP unitholders of approximately 10% based upon the 20-trading day average closing prices of both securities ending August 3, 2010.

    Note: 10% above the 20-trading day average (not today's pricing).

    2. As of COB Friday: a 4% premium:
    Holders of Inergy Holdings /quotes/comstock/13*!nrgp/quotes/nls/nrgp (NRGP 32.71, +0.86, +2.70%) units will receive 0.77 of an Inergy L.P. common unit in exchange for each of their common units. The offer values Inergy Holdings at $33.40 a unit, a premium of $1.29, or 4%, over its closing price of $32.11 a unit on Friday.

    A cheap price to pay for distribution rights for NRGP. As a NRGP stockholder I do not like this. The distribution was set to take off. Instead we only get a 4% premium. Market was starting to recognize this (see 20 day premium avg at 10%; COB Friday = 4%).

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    • You are getting a 59% increase in the distribution if you take a few minutes to do the math.

      You recieve .77 units of NRGY for each NRGP unit that you own. NRGY pays $2.82, so you are getting what amounts to $2.17 whereas you are currently receiving $1.36. That is a 59% increase in income, versus just a minimal increase in capital. NRGP/NRGY is just arbitraging the difference in valuation.

      This is a decent deal for NRGP holders. I would prefer to stay separate to get the better growth, but all good things must come to an end....I made a killing on NRGP, on BGH, on MGG, MWP, KSL, PLX and others that were taken out. The market is very efficient at finding undervalued MLPs and GPs.