Northern Tier Energy LP (NYSE: NTI), a Delaware limited partnership ("Northern Tier Energy (NTI) announced today that it has commenced an underwritten public offering of 9,000,000 common units representing limited partner interests in the Partnership (the "Offering") held by Northern Tier Holdings LLC (the "Selling Unitholder"). The common units are being sold in the offering pursuant to a registration statement on Form S-1 previously filed with the Securities and Exchange Commission (the "Commission"). In addition, the Selling Unitholder anticipates granting the underwriters a 30-day option to purchase up to an additional 1,350,000 common units. The Partnership will not receive any proceeds from the sale of the common units in the Offering.
Barclays Capital Inc., BofA Merrill Lynch, Goldman, Sachs & Co., Citigroup Global Markets Inc., UBS Securities LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., and J.P. Morgan Securities LLC are acting as bookrunners for the Offering and Macquarie Capital (USA) Inc. is acting as a co-manager for the Offering.
volume is about 1 million shares above normal so far today so looks like the sale is on. May take a few days to unload all 9 million shares so there could be a fair bit more downward pressure on share price near term but I picked a few shares up at 24.39, close to the up trendline, for a short term trade
but a dip under 24 is where I want to sell another june 22.5 put to add to the small position I already started in NTI
The way I read this is that this is a sale of partner units through a number of investment banks to other buyers without selling through normal market channels. My guess is that TPG GROUP HOLDINGS, who owns close to 55 million shares, is lowering their exposure to rebalance their portfolio. It looks like over 20% of their total capital is invested in NTI. I think any selling going on is retail selling in sympathy.
To answer rlp who asked "However, does the fact that they (the parent) are selling units mean good news, bad news, or does not matter for the current unitholders?"
We don't know specifically why the parent is selling their units (do they need cash now for some reason), however one plausible idea (along the lines of what norris suggested) is that they know they are in a sweet spot now and the current differentials are not sustainable longer term. However most analysts had been suggesting that the spreads which are so profitable to these refiners in the right locations might persist for years. So are the guys in the know thinking that's too optimistic and the new pipelines might result in a much quicker collapse in spreads?
pretty soon after the IPO though.
What do they want the money for? refinery upgrades?
And if they are really raking in the cash like all reports say then why do they need to raise money?
Does seem curious, however I am not invested so purely academic interest.