Sunoco, a company that operates pipelines and storage facilities among other assets in the United States, has agreed to be sold to Energy Transfer Partners, a pipeline operator, for $5.3 billion.
Sunoco announced last year that it was exiting the oil refinery business. Energy Transfer, based in Dallas, will offer Sunoco shareholders $25 cash and .52 of an Energy Transfer share for each of their Sunoco shares. The New York Times reported, “The total value of the cash-and-share deal, which must be approved by regulators and Sunoco shareholders, is $50.12 a share, which is 29 percent about Suncoco closing price on Friday.” Market Watch reported that “Sunoco shareholders can elect to receive, for each Sunoco common share they own, either $50.00 in cash, 1.0490 ETP common units or a combination of $25.00 in cash and .5245 common units.”
Sunoco Senior Management and the Board of Directors is under investigation by Tripp Levy PLLC, a leading national securities law firm, for “possible breaches of fiduciary duty and other violations of state law,” reported Market Watch. “The investigation concerns, among other things, whether the consideration to be paid to Sunoco shareholders is unfair, inadequate and substantially below the fair or inherent value of Sunoco, and whether the senior management of Sunoco are putting their own self-interests ahead of that of the Company's shareholders,” continued Market Watch.
Energy Transfer hopes that the deal with Sunoco will “help expand its presence in the transportation, storage and logistics of crude oil, natural gas and refined petrochemical products,” reported the NYTimes.
“’This transaction represents the next step in Energy Transfer Partners’ transformation into a more diversified enterprise with an integrated and expanded footprint,’ the company’s chief executive, Kelcy L. Warren, said in a statement. ‘We will enhance the size and scale of the E.T.P. platform by creating new service capabilities and entering new geographic operating areas,’” reported the NYTimes.