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40+ years experience Financial/Investment Advisor, Portfolio Manager, Fundamental Research Analyst, Evaluation Services and Shareholder Advocacy. I know what I don't know.
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  • MLP merger/takeover candidates. 0 comments
    Aug 19, 2010 8:43 AM
    MLPs as likely merger/takeover candidates:
    Many investors favor natural gas pipeline MLPs for a variety of reasons. One very important reason is many offer current dividend/distribution rates of 6-9%. Money Market funds, Treasuries, CDs and other cash returns pale by comparison. Any longer term fixed income investor will be hurt by any rise in interest rates.
    There have been mergers and acquisitions of natural gas pipeline MLPs and this is likely to accelerate.
    Three reasons are; Economies of scale. A much rate of return which is higher than money sitting in cash and much less than money borrowed for acquisition or merger. Potential.
    Likely candidates because of size, capitalization, distribution rate and location are CPNO, NGLS, DPM and others. Look at them.

    Disclosure: Long all
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