Seeking Alpha

Regency Energy buys PVR Partners for $5.6B

  • Regency Energy Partners (RGP) agrees to acquire PVR Partners (PVR) in a $5.6B deal that includes the assumption of $1.8B in net debt.
  • RGP says its offer is valued at $28.68 per PVR unit, a 26% premium over Wednesday’s close.
  • The acquisition will create a leading gas gathering and processing platform with a scaled presence across North America's premier high-growth unconventional oil and gas plays in Appalachia, west Texas, south Texas, the Mid-Continent and north Louisiana.
  • PVR +19.6% premarket.
Comments (3)
  • aretailguy
    , contributor
    Comments (1382) | Send Message
     
    The press release barely mentions PVR's coal assets. I'm thinking that holding on to the RGP shares received for my PVR shares in anticipation of RGP spinning off the coal assets might be a highly likely event down the road. We shall see....
    10 Oct 2013, 11:08 AM Reply Like
  • njsteve59
    , contributor
    Comments (15) | Send Message
     
    Agreed. Coal assets have kept PVR down, and that's how RGP picked up PVR on the cheap. One other thing, the RGP press release indicates that the acquisition is dilutive, but RGP plans to stick to their distribution growth plans for 2014. RGP has a history of increasing their distribution in half-cent increments over two or three quarters (when they do increase it, that is). They just increased in the last payout. Is this foretelling things to come, and is RGP getting bashed unnecessarily?
    10 Oct 2013, 12:33 PM Reply Like
  • aretailguy
    , contributor
    Comments (1382) | Send Message
     
    I have never liked RGP as I think they are over levered and do a poor job of covering the distribution. This purchase just made things worse so I will not be around long unless they will spin off the coal assets. They would be a good fit for ARLP but only if the price was right.
    10 Oct 2013, 12:55 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs