MIDCOAST ENERGY PARTNERS, L.P. (NYSE:MEP) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On January 26, 2017, Midcoast Energy Partners, L.P. (the
Partnership) entered into an Agreement and Plan of Merger (the
Merger Agreement) with Enbridge Energy Company, Inc. (EECI),
Enbridge Holdings (Leather) L.L.C., an indirect wholly-owned
subsidiary of EECI, and Midcoast Holdings, L.L.C., the general
partner of the Partnership (the General Partner). to the Merger
Agreement, at the effective time, subject to the terms and
conditions thereof, each publicly held Class A Common Unit of the
Partnership will be converted into the right to receive $8.00 per
Class A Common Unit in cash without any interest. Following the
merger, EECI will own a number of Class A Common Units equivalent
to the number of publicly held Class A Common Units converted
into the right to receive the merger consideration. All Incentive
Distribution Rights owned by the General Partner and all units
owned by Enbridge Energy Partners, L.P. (EEP) will remain
outstanding.
The closing of the merger is subject to customary conditions,
including receipt of approval by a majority of the Partnerships
outstanding common units. to the Partnerships limited partnership
agreement, the subordination period with respect to the
subordinated units held by EEP will end, and the subordinated
units held by EEP will be converted to Class B Common Units,
following the Partnerships February 14, 2017 distribution
payment. Upon conversion, EEP will own approximately 52 percent
of the Partnerships outstanding common units, comprising the
Class A Common Units and the Class B Common Units, which
percentage will be sufficient for EEP to approve the Merger
Agreement and the transactions contemplated thereby on behalf of
the holders of the Partnerships common units. The Partnership,
EECI and EEP also have entered into a Support Agreement, dated
January 26, 2017 (the Support Agreement), to which EEP, in its
capacity as a holder of MEP units, has agreed to vote its units
in favor of the Merger Agreement and the transactions
contemplated by the Merger Agreement. The Support Agreement will
terminate at the effective time of the merger, if the Merger
Agreement is terminated in accordance with its terms, if the
board of directors of the General Partner makes an adverse
recommendation change as permitted by the terms of the Merger
Agreement, or on the date on which any modification, waiver or
amendment to the Merger Agreement that is made without the prior
written consent of EEP.
The Merger Agreement includes customary representations and
warranties. It also includes customary covenants and agreements,
including interim operating covenants and non-solicitation
provisions. Prior to receipt of the requisite unit holder
approval, the non-solicitation provisions are subject to an
exception for unsolicited acquisition proposals that the board of
directors after consultation with the Conflicts Committee
(defined below) determines are likely to result in a superior
proposal. The Merger Agreement also includes customary
termination provisions, including if the merger has not been
completed by June 30, 2017.
The Merger Agreement provides that the Partnerships 2016 fourth
quarter distribution will be made prior to the effective time of
the merger.
The Partnership was represented in the negotiations by a
committee of the independent directors of the general partner of
the Partnership (the Conflicts Committee). The Conflicts
Committee, after consultation with its independent legal and
financial advisors, approved the merger agreement and determined
that the merger agreement and the transactions contemplated by
the merger agreement are fair and reasonable to and in the best
interests of MEP and its unaffiliated unitholders, particularly
in light of MEPs distribution coverage and balance sheet
challenges. The board of directors of the general partner of the
Partnership, acting based in part upon the recommendation of the
Conflicts Committee, unanimously approved the Merger Agreement
and determined that the Merger Agreement and the transactions
contemplated by the Merger Agreement are fair and reasonable to
and in the best interests of the Partnership and the limited
partners.
The foregoing description of the Merger Agreement and Support
Agreement does not purport to be complete and is qualified in its
entirety by reference to the full text of the Merger Agreement
and Support Agreement, which are attached hereto as Exhibits 2.1
and 10.1 and are incorporated herein by reference. The
representations, warranties and covenants of each party set forth
in the Merger Agreement have been made only for purposes of, were
and are solely for the benefit of the parties to, the Merger
Agreement, may be subject to limitations agreed upon by the
contracting parties, including being qualified by confidential
disclosures made for the purposes of allocating contractual risk
between the parties to the Merger Agreement instead of
establishing these matters as facts, and may be subject to
standards of materiality applicable to the contracting parties
that differ from those applicable to investors. In addition, such
representations and warranties (a)will not survive consummation
of the merger and cannot be the basis for any claims under the
Merger Agreement by the other party after termination of the
Merger Agreement, except as a result of willful or intentional
breach, and (b)were made only as of the date specified in the
Merger Agreement. Moreover, information concerning the subject
matter of the representations and warranties may change after the
date of the Merger Agreement, which subsequent information may or
may not be fully reflected in the parties public disclosures.
Accordingly, the Merger Agreement is included with this filing
only to provide investors with information regarding the terms of
the Merger Agreement, and not to provide investors with any other
factual information regarding the Partnership, the General
Partner or EECI, their respective affiliates or their respective
businesses. The Merger Agreement should not be read alone, but
should instead be read in conjunction with the other information
regarding the Merger Agreement, the Partnership and other
parties, their respective affiliates and their respective
businesses, included in reports, statements and other filings
that the Partnership makes with the SEC.
In connection with the proposed merger, the Partnership
will prepare an information statement to be filed with the SEC
that will provide additional important information concerning the
proposed merger. When completed, a definitive information
statement will be mailed to the unitholders of the Partnership.
PARTNERSHIP UNITHOLDERS ARE STRONGLY ADVISED TO READ ALL RELEVANT
DOCUMENTS FILED WITH THE SEC, INCLUDING THE PARTNERSHIPS
INFORMATION STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. The Partnerships
unitholders will be able to obtain, without charge, a copy of the
information statement (when available) and other relevant
documents filed with the SEC from the SEC’s website at
www.sec.gov. MEP unitholders will also be able to obtain, without
charge, a copy of the information statement and other documents
relating to the proposed merger (when available) at
www.midcoastpartners.com.
Item 7.01 Regulation FD Disclosure.
On January 27, 2017, the Partnership issued a press release
announcing the Merger Agreement, as well as its distribution for
the fourth quarter of 2016. The press release is furnished as
Exhibit 99.1.
This information is not deemed to be filed for purposes of
Section18 of the Securities Exchange Act of 1934, as amended, and
is not incorporated by reference into any registration statements
filed under the Securities Act of 1933, as amended.
Item9.01.Financial Statements and Exhibits.
(d) Exhibits
Reference is made to the Index of Exhibits following the page,
which is hereby incorporated into this Item.
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned there unto duly authorized.
|
MIDCOAST ENERGY PARTNERS,L.P. (Registrant) |
||
| By: | Midcoast Holdings, L.L.C. | |
| its General Partner | ||
| Date: January 27, 2017 | By: | /s/ NOOR S. KAISSI |
|
Noor S. Kaissi, Controller (Duly Authorized Officer) |
Index of Exhibits
| Exhibit Number | Description | |
| 2.1 |
Agreement and Plan of Merger, dated January 26, 2017, by and among Midcoast Energy Partners, L.P., Enbridge Energy Company, Inc., Enbridge Holdings (Leather) L.L.C. and Midcoast Holdings, L.L.C. (Schedules and exhibits have been omitted |
About MIDCOAST ENERGY PARTNERS, L.P. (NYSE:MEP)
Midcoast Energy Partners, L.P. is a limited partnership that serves as Enbridge Energy Partners, L.P.’s primary vehicle for owning and operating its natural gas and natural gas liquids (NGLs) midstream business in the United States. The Company operates through two segments: Gathering, Processing and Transportation, and Logistics and Marketing. Its gathering, processing and transportation business includes natural gas and NGL gathering and transportation pipeline systems, natural gas processing and treating facilities, condensate stabilizers and an NGL fractionation facility. Its logistics and marketing business provides marketing services of natural gas, NGLs and condensate received from its gathering, processing and transportation business. Its physical assets consist of over 200 transport trucks, approximately 370 trailers and over 200 railcars for transporting NGLs; TexPan liquids railcar facility near Pampa, Texas, and Petal truck and rail facility near Hattiesburg, Mississippi. MIDCOAST ENERGY PARTNERS, L.P. (NYSE:MEP) Recent Trading Information
MIDCOAST ENERGY PARTNERS, L.P. (NYSE:MEP) closed its last trading session up +0.05 at 8.75 with 158,746 shares trading hands.