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Buckeye Partners, L.P. Message Board

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  • rjraecek rjraecek Nov 30, 2010 11:27 AM Flag

    Merger question

    It's a toss of the coin.
    Take a look see at EPD and what has happened since the buyout of TPP & EPE.
    I am a long hauler on BPL and will purchase addition units. The distribution at $0.975 ain't bad.

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    • I disagree that it is the toss of a coin. MMP was the first MLP to take out its GP... being the first it did the takeout at 11x ebitda which in today's GP takeout world was a real bargain (BPL had to pay over 20x ebitda to buy out its GP).

      MMP just completed a huge acquisition of BP assets and due to much lower financing costs combined with better metrics the deal is way more accretive than thought just 90 days ago.

      LONG TERM. Taking out the GP should result in lower finance costs and higher DCF for shareholders.

      The exception may be NRGY which had no choice but to take out its GP as its fundamentals have deteriorated badly of late.

      But MMP, EPD, and BPL should prosper nicely. I expect all 3 to be able to grow DCF to shareholders by 5% for the forseeable future.

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