Crosstex Energy Inc. Message Board

You don't take the MLP private because you need the MLP as a means to constantly tap the equity markets. Any time you see an MLP and the GP being bought, the GP is almost always bought by the other MLP(and essentially dissolved) and usually bought with cash. The MLP that is being acquired usually has its MLP units converted to the acquiring MLP's units. Look when KMP acquired Sante Fe Partners and its privately held GP, look at EPD's acquisition of GTM and its GP, look at VLI's acquisition of KPP and KSL(the GP), look at PAA's acquisition of PPX and its privately held GP.

As geo points out, the GP is the key to the MLP, you would shoot yourself in the foot if you took the MLP private, because that would eliminate cheap equity, furthermore, you have to have control of the GP to be able to grow the MLP.

For this reason, I suspect that if you are looking for premiums, the real premiums will come from owning a GP that is being bought, not by holding the MLP. Exceptions occur, for example, TLP has been on a tear since SemGroup and Morgan Stanley are dueling it out for control of TMG (the GP). Obviously, it favors TLP for SemGroup to win, but either way, TLP has gained.