Breitburn Energy to acquire QR Energy in $3B deal


Breitburn Energy Partners (NASDAQ:BBEP) agrees to acquire QR Energy (NYSE:QRE) in a unit-for-unit exchange implying a transaction value of ~$3B.

QR unitholders will receive ~72M common units of BBEP, or 0.9856 of a unit, for each unit of QR Energy they own; the consideration to be received by QR unitholders is valued at $22.48/unit, a 19% premium to yesterday's closing price.

BBEP's senior management team will lead the combined company; once the deal closes, BBEP will add a new director to its board that is mutually agreed upon by both companies.

QRE +8.8%, BBEP -3.1% premarket.

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Comments (30)
  • Peppino
    , contributor
    Comments (32) | Send Message
     
    Nothing Transcendental.
    Just Fair. QRE could have negotiated a better deal.
    24 Jul 2014, 07:37 AM Reply Like
  • Stanford Chemist
    , contributor
    Comments (2278) | Send Message
     
    Question: why isn't the premarket price 22.48? Is it because it's not a done deal yet?
    24 Jul 2014, 08:28 AM Reply Like
  • losbronces
    , contributor
    Comments (1007) | Send Message
     
    Its also an all-stock deal. So the actual value will depend on the price of (NASDAQ:BBEP) when the deal closes. BBEP is headed down on this news.

     

    Probably won't close until Q1 2015. Although timing is mitigated by the fact that (NYSE:QRE) should continue with its monthly distributions--but that needs to be verified.
    24 Jul 2014, 09:54 AM Reply Like
  • losbronces
    , contributor
    Comments (1007) | Send Message
     
    Its an all-stock deal. So what you will receive for your (NYSE:QRE) units is 0.9856 unit of (NASDAQ:BBEP) per each QRE unit. So who knows what that will be worth when it finally closes and if it closes.

     

    Even if it was an all-cash deal, you wouldn't see $22.48 today due to the risk associated with the deal closing and the time value of money. You sometimes see higher prices on announcements like this when it is assumed that other bidders will come in. I'm not seeing that here.

     

    I honestly don't see a good arbitrage play here. No cash in the deal and BBEP results last Q were not good imo. 
    24 Jul 2014, 10:40 AM Reply Like
  • Wilcoj
    , contributor
    Comments (57) | Send Message
     
    I'm not greedy - happy with a 19% premium.
    24 Jul 2014, 08:51 AM Reply Like
  • memshu
    , contributor
    Comments (622) | Send Message
     
    is this a good deal for bbep? bbep is buying qre @10.45x dcf 2014. yday bbep closed @10.24x dcf 2014. where is the accretion?
    24 Jul 2014, 09:09 AM Reply Like
  • buster0391
    , contributor
    Comments (338) | Send Message
     
    no way 19% premium. wait till market opens.
    24 Jul 2014, 09:09 AM Reply Like
  • Wilcoj
    , contributor
    Comments (57) | Send Message
     
    See Losbronces comment. BBEP price has dropped, so it's actually less than 19% as of now.
    24 Jul 2014, 10:06 AM Reply Like
  • memshu
    , contributor
    Comments (622) | Send Message
     
    when is this supposed to close?
    24 Jul 2014, 09:11 AM Reply Like
  • Wilcoj
    , contributor
    Comments (57) | Send Message
     
    Late 2014 or early 2015
    24 Jul 2014, 10:00 AM Reply Like
  • Tonman
    , contributor
    Comments (45) | Send Message
     
    Are there any other MLP's that are ripe for buyouts like QRE?
    BBEP missed on earnings and revenue. How will buying QRE help?
    24 Jul 2014, 09:18 AM Reply Like
  • ComputerBlue
    , contributor
    Comments (1370) | Send Message
     
    Legacy might be a good opportunity for someone. LGCY.
    24 Jul 2014, 09:49 AM Reply Like
  • ComputerBlue
    , contributor
    Comments (1370) | Send Message
     
    LRR Energy too. Ticker $LRE. They look a little more enticing as an acquisition target imo.
    24 Jul 2014, 10:01 AM Reply Like
  • losbronces
    , contributor
    Comments (1007) | Send Message
     
    (NYSE:LRE) is definitely a smaller bite for someone, its only 27% the size of (NASDAQ:LGCY) based on market cap.
    24 Jul 2014, 10:08 AM Reply Like
  • arthur_bishop1972
    , contributor
    Comments (4387) | Send Message
     
    LRE blew up today, b/c they are likely one of the next in line to be bot out.
    25 Jul 2014, 01:11 AM Reply Like
  • Tonman
    , contributor
    Comments (45) | Send Message
     
    QRE is up only 8.8% in premarket. Will be interesting to see if 19% premium is reflected in the price after open.
    24 Jul 2014, 09:20 AM Reply Like
  • bruce.cameron
    , contributor
    Comments (52) | Send Message
     
    Time out...will this deal go through at this price or at all. BBEP missed by 1.08 for the quarter, revenue down by 55% yr to yr
    24 Jul 2014, 09:30 AM Reply Like
  • Clayton Rulli
    , contributor
    Comments (3415) | Send Message
     
    closes early 2015
    24 Jul 2014, 09:42 AM Reply Like
  • WhitneyB
    , contributor
    Comments (895) | Send Message
     
    Great arbitrage opportunity this morning to buy QRE for $20 1/2 and then swap it for BBEP at 22 1/2.
    24 Jul 2014, 09:44 AM Reply Like
  • just a user
    , contributor
    Comments (72) | Send Message
     
    damn. wish i had some dry powder. argh. :)
    24 Jul 2014, 11:17 AM Reply Like
  • buster0391
    , contributor
    Comments (338) | Send Message
     
    how the hell can you swap if the deal doesn't close for 6 months. what bbep price will be then is anyone's guess
    24 Jul 2014, 09:46 AM Reply Like
  • WhitneyB
    , contributor
    Comments (895) | Send Message
     
    Same could be said for QRE; but if you don't like the BBEP price in 6 months, unload the QRE before the deal closes.
    24 Jul 2014, 11:28 AM Reply Like
  • SlashStoxx
    , contributor
    Comments (10) | Send Message
     
    I have owned bbep for the past two years. I have reinvested dividends from the start. I will continue doing this. BBEP has been very good to me and its shareholders.
    24 Jul 2014, 12:05 PM Reply Like
  • w.sak
    , contributor
    Comments (180) | Send Message
     
    What is the investigation about between QRE & BBEP & HOW MUCH WILL THE LAWYERS BLEED OUT OF IT?
    24 Jul 2014, 01:25 PM Reply Like
  • losbronces
    , contributor
    Comments (1007) | Send Message
     
    This happens every time when there is a merger or buyout. These law firms specialize in attempting to extract a bit of money from these activities.

     

    The main claim will be that QRE management didn't get the best possible price for the shareholders.
    24 Jul 2014, 01:37 PM Reply Like
  • Wilcoj
    , contributor
    Comments (57) | Send Message
     
    Ah so. Country has WAY too mant lawyers.
    25 Jul 2014, 08:02 AM Reply Like
  • w.sak
    , contributor
    Comments (180) | Send Message
     
    I agree, but maybe for the 1st time, I'm glad they're are lawyers.
    The pounding a lot of us got on ROYT may take a while.
    The claim of jobs being lost, not only in oil, but from police,
    city, state, all the way to the farmers, would all suffer from this.
    This has to be brought to a judge, even if it goes through.
    Time for the lawyers to turn it into Days of our lives!
    25 Jul 2014, 01:22 PM Reply Like
  • arthur_bishop1972
    , contributor
    Comments (4387) | Send Message
     
    Hold your shares of either/both co's and stop trying to guess the future. The buyout game for these co's will heat up even more over the next several years imo.
    25 Jul 2014, 01:12 AM Reply Like
  • w.sak
    , contributor
    Comments (180) | Send Message
     
    I don't see BBEP going away anytime soon. I say it's a good time to buy.
    I should of waited till today instead of yesterday, but I will be long on this.
    25 Jul 2014, 01:32 PM Reply Like
  • w.sak
    , contributor
    Comments (180) | Send Message
     
    I owned QRE, I saw the big jump in QRE & the drop in BBEP.
    So I sold QRE & bought BBEP, now I wait. My sale of QRE was
    bigger a profit than expected. So here's how I see it. I didn't really lose
    my QRE, I got a 4$ raise a share & got into a stock I had an eye on anyway.
    26 Jul 2014, 11:16 AM Reply Like
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