© 2013 The Texas Lawbook.
By Mark Curriden
Senior Writer for The Texas Lawbook
(March 21, 2013) – Dallas-based Energy Transfer Partners, which is one of the largest and most diversified oil and gas companies in the U.S. with assets exceeding $16 billion, announced Thursday that its financial structures are overly complicated and need simplifying.
Never has there been a more true statement. Follow me on this:
ETP is purchasing a 60 percent ownership stake in its own holding company, ETP Holdco, from one of its sister corporations, Energy Transfer Equity, which owns the general partner and distribution rights of ETP.
ETP and ETE created ETP Holdco to control the assets of two recent acquisitions – ETE’s $4.2 billion purchase of Southern Union in 2011 and ETP’s $5.3 billion acquisition of Sunoco Inc. in 2012.
ETE owns 60 percent of ETP Holdco, while ETP owns 40 percent. Under Thursday’s agreement, ETP, which operates as a master limited partnership, agrees to pay $3.75 billion to ETE, which also is structured as an MLP. ETE will receive $2.35 billion of newly issued ETP units and $1.4 billion in cash.
ETP also owns 70 percent of Lone Star NGL and 32 percent of Sunoco Logistic Partners, two separate diversified oil and gas corporations.
ETP General Counsel Tom Mason, a former energy law partner at Vinson & Elkins, hired his former law firm and Latham & Watkins to handle the current transaction.
The V&E team, which advises ETP, is led by Houston corporate partners David Oelman and Matt Strock, with assistance from associates Lande Spottswood and Brett Riesenfeld. Partner John Lynch and associate Ryan Carney handled tax matters and partners Billy Vigdor and Cathy Lewis handled antitrust matters.
Latham, which represents ETE, is led by Houston corporate partners Bill Finnegan and Sean Wheeler, with associates Debbie Yee and Cephas Sekhar. Advice was also provided on tax matters by partner Tim Fenn and associate Eric Matuszak in Houston.
ETA on the ETE and ETP deal closing is within the next three months.
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