On December 2, 2014, the Partnership delivered a letter to the board of directors of the general partner of QEP Midstream in which it made a non-binding proposal to merge a wholly owned subsidiary of the Partnership with QEP Midstream (the "Proposed Merger"). The Proposed Merger would occur in a unit-for-unit exchange at a ratio of 0.2846 Partnership common units for each outstanding QEP Midstream common unit. The terms of the Proposed Merger will be subject to negotiation, review and approval by the Board and the conflicts committee of the board of directors of the general partner of QEP Midstream. The Proposed Merger will also be subject to approval by QEP Midstream unitholders in accordance with the QEP Midstream partnership agreement. The Partnership cannot predict whether the terms of a potential combination will be agreed upon by the conflicts committee of the board of directors of QEP Midstream, the Board or the unitholders of QEP Midstream or the timing of such agreement, if any.
Looks like a low ball offer.
If the merger is approved then when it is announced there will be a short squeeze.
Two things not mentioned on the CC were the dividend and share buy back. I think they said they had about $235 million in cash right now. If they are going to declare a dividend their normal time to do so would be around the 20th. I would like to see them buying back as many shares as they can right now, even if it means missing a dividend payment. If they took a $100 million they could possibly buy back over 10% of the float. This would create a possible dividend increase once all the accounting has been settled.
I do not understand why you would short KMI since once the takeover is done the stock price will go much higher, unless you think the deal will not go through? Also if this forced sale was never done you could sit with your shares forever and not be stuck with the high taxes. The only way you benefit is if you sell KMP and buy something else.
I do not think you will get any more shares of KMI no matter how high the price goes since the conversion rate is 2.1931 plus $10.77 for ever share of KMP you own. The higher the stock price the higher the taxes. The only thing different will be your new basis in KMI. If you owned KMP for any length of time the income will probably push you up into a much higher tax bracket than you think. Also there is the Obamacare tax of 3.8% to add onto your regular tax rate you will also have to consider. This deal is not very good for long term holders.
I have been thinking of replacing KMP with another MLP also. The problem with trying to get the highest price is the taxes that will bring along with the higher price. If you have owned KMP for a long time your tax burden will be quite high. Also if you want to determine your approx. tax burden to 2013 you can go to KMP's K1 site and click on the link at the bottom of the left side that say projected gain/ loss calculator. This may be a good deal in the long run if you can afford the taxes and reduction in income.
Would wait for a little while. Stock is topped out and is starting to drop on the chart. Would think somewhere in the mid 30's or so would be a good area to buy. They will be hurt by rising interest rates as they were last year. GL
The market is in correction mode right now and this is helping to drop the stock price. I also think that this secondary came to some unexpectedly and maybe they are afraid to buy right now. Also with the stock having traded for so long above book I think that the price is coming more in line with the other MREITs, though it still is over priced compared to the others. As for how much the dividend will be, I do think that most people are not able to calculate approx. how much it will be other than some of those on SA. I personally am waiting to see if it breaks down to around in the $13 range before buying again. I am glad I sold in Dec.
Just wondering what you think the catalysts are that drive this to 15? The chart looks like it will go lower first before it goes higher. I am long BWP from much higher.
The real question right now is where is book value? If it was over $15 before the stock issuance then they issued shares below book. But if you subtract the divi of 67cents from the $15.19 you get a book of $14.52 which makes the share issuance accretive to book provided they have somewhere to place the money. Also if they did not buy the investment before today then they are looking at buying a lower coupon debt that will lose value when rates begin to rise again. I still think that the economy is too weak for much higher rates but that is just me. The problem is that eventually rates will rise and WMC has not done a good job protecting book value up to now. A high dividend with decreasing book is a losers game.
Maybe because it is trading way over book value. I would not be a buyer till it falls below book like all the rest of the MREITs.
The technology was not available till just the last few years for oil and gas recovery. Reagan's policies brought down Russia without a shot fired. Obama's policies have empowered Russia to become more aggressive, possible third world war coming because of him. The only way to defeat a bully is to be stronger than them, weakness empowers a bully.