MarkWest Rose and MPLX Fell Due to the Revised Deal Terms
Midstream and Upstream MLP Gainers and Losers on November 11
Top gainers
MarkWest Energy Partners (MWE) was the top gainer among midstream MLPs at the end of trading on Wednesday, November 11. It rose 3.8% yesterday after an announcement by Marathon Petroleum (MPC). It will increase the cash consideration for the MPLX-MWE merger announced earlier. At the same time, MPLX LP (MPLX) fell 6.1%.
MarkWest Energy Partners
Marathon Petroleum increased the one-time cash payment by $400 million to $1.1 billion from $675 million. Under the new terms, each MarkWest Energy unitholder would receive 1.1 MPLX common units plus a one-time cash payment of ~$5.21 per MarkWest Energy common unit. According to Gary R. Heminger, MPLX’s CEO, “The enhancement to the terms of our agreement reflects the commitment of MPLX and its sponsor, MPC, to the combination with MarkWest and our conviction that the transaction will create significant benefits for the unitholders, customers and employees of both partnerships.” Frank M. Semple, MarkWest Energy’s CEO, added that “Our Board continues to support the combination with MPLX and recommends that MarkWest unitholders vote in favor of the merger proposal.”
Before this announcement, John Fox, MarkWest Energy’s former CEO, said that he would vote against the MarkWest Energy-MPLX merger deal. He urged other shareholders to do the same. John Fox holds less than 1% in MarkWest Energy.
Summit Midstream Partners
Summit Midstream Partners (SMLP) is next on our list of the top midstream MLP gainers. It rose 1.9% yesterday. It has returned -51.6% YTD (year-to-date). Summit Midstream Partners provides natural gas, crude oil, and produced water gathering and processing services.
Other gainers
The next three MLPs on the list of the top five midstream MLP gainers on November 11 are PBF Logistics (PBFX), VTTI Energy Partners (VTTI), and Western Refining Logistics (WNRL). They rose 1.7%, 1.2%, and 0.30%, respectively. These three MLPs have returned -2.2%, -17.3%, and -23% YTD.
The Alerian MLP ETF (AMLP) is comprised of 23 midstream MLPs. It fell 1.7% yesterday. MarkWest Energy accounts for 7.0% of AMLP. For context, the upstream energy company heavy SPDR S&P Oil & Gas Exploration & Production ETF (XOP) fell 4.5% on the same day.
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