SunCoke Energy, Inc. (NYSE:SXC) today announced that it has submitted a proposal to the Board of Directors of the general partner of SunCoke Energy Partners, L.P. (NYSE: SXCP) to acquire all of SXCP’s common units not already owned by SXC. Under the terms of the proposal, SXCP common unitholders would receive approximately 1.65 new shares of SXC common stock for each SXCP common unit on the New York Stock Exchange, representing an implied purchase price of $17.80 per SXCP common unit, or a 5% premium, based on the closing price as of October 28, 2016, which was the last day of trading for each of SXC and SXCP prior to this announcement.
Assuming the completion of the proposed transaction, SXCP will become a wholly-owned subsidiary of SXC, and SXCP’s common units will cease to be publicly traded. SXCP’s 7.375% Senior Notes due 2020 will remain outstanding.
“We believe this proposed transaction enhances value for both SXC shareholders and SXCP unitholders. The merger of SXC and SXCP will result in significant cash flow accretion to SXC shareholders, generate meaningful cash flow synergies for the combined organization, and create greater financial flexibility to initiate a dividend, further de-lever the balance sheet and pursue a broader set of growth opportunities where we may have product or customer adjacencies,” said Fritz Henderson, Chairman, President and CEO of SXC. ”The combination of these financial and strategic benefits will create a stronger combined company and will maximize value for both investor bases.”
The proposal has been made to the Board of Directors of SXCP’s general partner, which is an indirect wholly-owned subsidiary of SXC. SXC expects that the Board of Directors of SXCP’s general partner will delegate the authority to review and evaluate the proposal to its Conflicts Committee. The Conflicts Committee, which is composed of only the independent directors of the Board of Directors of SXCP’s general partner, will consider the proposal pursuant to applicable procedures established in SXCP’s partnership agreement. The proposed transaction is subject to the negotiation and execution of mutually acceptable agreement and plan of merger, which would provide the definitive terms of the transaction. The closing of the proposed transaction also is conditioned upon customary regulatory approvals. If an agreement is reached and definitive terms ultimately are approved by each of the Boards of Directors of SXC and SXCP, the transaction also will require approval by a majority of votes cast by SXC shareholders at a meeting, and approval by a majority of SXCP’s outstanding common units, including the common units held by affiliates of SXC. Through its affiliates, SXC owns approximately 53.9% of SXCP’s outstanding common units which SXC intends to vote in favor of the proposed transaction.
CONFERENCE CALL AND WEBCAST INFORMATION
SXC and SXCP will jointly host a live conference call and webcast to discuss the proposed transaction at 9:00 a.m. Eastern Time (8:00 a.m. Central Time) today, October 31, 2016. A presentation outlining the transaction will be posted on the home page of the ”Investors” section of SXC’s website, at www.suncoke.com, prior to the call. Investors may participate in this call by dialing 1-877-201-0168 in the U.S. or 1-647-788-4901 if outside the U.S., confirmation code 10953956. The conference call will be archived for replay on a webcast link located in the “Investors” section of www.suncoke.com.
ABOUT SUNCOKE ENERGY, INC.
SunCoke Energy, Inc. (NYSE:SXC) supplies high-quality coke to the integrated steel industry under long-term, take-or-pay contracts that pass through commodity and certain operating costs to customers. We utilize an innovative heat-recovery cokemaking technology that captures excess heat for steam or electrical power generation. We are the sponsor of SunCoke Energy Partners, L.P. (NYSE:SXCP), a publicly traded master limited partnership, holding a 2 percent general partner interest, 53.9 percent limited partnership interest and all of the incentive distribution rights. Our cokemaking facilities are located in Illinois, Indiana, Ohio, Virginia, Brazil and India. To learn more about SunCoke Energy, Inc., visit our website at www.suncoke.com.