Magellan Midstream (MMP) Unitholders OK ONEOK Merger Deal
Energy infrastructure provider Magellan Midstream Partners, L.P.’s MMP unitholders have voted in favor of the partnership's merger with another midstream operator ONEOK, Inc. OKE. This landmark $18.8 billion merger, set to be completed on Sep 25, 2023, will bring together two of the largest energy pipeline operators in the United States.
The merger — announced in mid-May — initially faced opposition from some Magellan unitholders. Their concerns were centered around potential tax implications and questions regarding the strategic benefits of the merger.
However, MMP management successfully navigated these issues after garnering support from unitholders by highlighting the substantial premium that the deal would offer and the potential for a more diversified and stable business as a result of the merger.
Preliminary results from the Magellan Special Meeting of Unitholders indicated an impressive 76% approval rate from common unitholders, representing around 111.2 million units or 55% of total outstanding units, surpassing the required majority for the merger to proceed.
Notably, ONEOK's unit holders also showed robust support for the transaction, with preliminary results indicating that approximately 96% of votes cast were in favor of it.
Upon completion of the merger, Magellan unitholders will receive $25 in cash and 0.667 shares of ONEOK common stock for each outstanding Magellan common unit they hold.
Magellan's management expressed satisfaction with the strong support from both sets of stakeholders, underscoring their belief in the combined company's potential for enhanced growth prospects and greater value generation compared to Magellan operating as a standalone entity.
Zacks Rank & Stock Picks
Tulsa, OK-based Magellan Midstream is a master limited partnership that owns and operates a diversified portfolio of energy infrastructure assets. It carries a Zacks Rank #2 (Buy) at present.
With MMP units expected to cease trading shortly, investors interested in the energy sector might consider the operators mentioned below. These companies sport a Zacks Rank #1 (Strong Buy) currently.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Solaris Oilfield Infrastructure SOI: It beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters at an average of 18.8%.
SOI is valued at around $458.7 million. Solaris Oilfield Infrastructure has seen its shares move up 5.1% in a year.
CVR Energy CVI: It beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. Over the past 60 days, CVR Energy saw the Zacks Consensus Estimate for 2023 move up 32.8%.
CVR Energy is valued at around $3.4 billion. CVI has seen its shares gain 15.9% in a year.
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Magellan Midstream Partners, L.P. (MMP) : Free Stock Analysis Report
ONEOK, Inc. (OKE) : Free Stock Analysis Report
CVR Energy Inc. (CVI) : Free Stock Analysis Report
Solaris Oilfield Infrastructure, Inc. (SOI) : Free Stock Analysis Report
