Marathon (MPC) Funds Higher for MPLX-MarkWest Deal, Again
Independent oil refiner and marketer Marathon Petroleum Corporation MPC has announced further increase in the cash that it will be paying for the MPLX LP MPLX-MarkWest Energy Partners, L.P. MWE merger.
Interestingly, the company had announced an increase in the cash consideration just last week. Marathon had raised the amount of cash payable per unit to MarkWest unitholders from $3.37 (in the original merger agreement) to $5.21.
Marathon has now agreed to increase this cash portion to $6.20 per unit. The company further added that this is the best and the final offer for MarkWest unitholders. The partnership’s stakeholders will receive a total cash consideration of $1.28 billion and 1.09 MPLX units for each MarkWest unit they hold. This amounts to a total consideration of about $51.74 per MarkWest unit according to the closing price on Nov 16.
Marathon also mentioned that three of MarkWest’s largest stakeholders, who own over 15% of the partnership’s outstanding units, have agreed to vote in favor of the transaction.
However, MarkWest co-founder and former CEO John Fox is still against this deal. Fox believes the deal is not good enough for the firm and MarkWest would be better off as a standalone company. He owns 0.7% of the MarkWest units.
The merger deal is expected to complete in the fourth quarter of this year, subject to necessary approvals.
Currently, both Marathon Petroleum and MarkWest carry a Zacks Rank #3 (Hold), while MPLX has a Zacks Rank #5 (Strong Sell).
A stock worth considering from the energy space is Energy Transfer Equity, L.P. ETE that sports a Zacks Rank #1 (Strong Buy).
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