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%).
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.