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SemGroup Rejects Unsolicited Acquisition Proposal By Plains All American Pipeline

Stocks in this article: SEMG

SemGroup® Corporation (NYSE: SEMG) (“SemGroup” or the “Company”) today commented on the unsolicited proposal announced by Plains All American Pipeline, L.P. (NYSE: PAA) (“Plains All American”) to acquire all of the outstanding shares of SemGroup for $24.00 per share in cash, which is the same as the unsolicited proposal made to SemGroup on October 6, 2011 and represents a premium of only 2% compared to the Friday, October 21, 2011 closing price of SemGroup.

Consistent with its fiduciary duties, and in consultation with its independent financial and legal advisors, the SemGroup Board previously reviewed the unsolicited proposal and determined that it substantially undervalued the Company. It also noted that the proposal was opportunistic and not compelling as it fails to adequately reflect SemGroup’s bright prospects for stockholder value creation.

In its October 19, 2011 response to Plains All American’s October 6, 2011 unsolicited proposal, SemGroup noted that its Board and management team are enthusiastic about the Company’s prospects and are confident of achieving stockholder returns in excess of what can be derived from Plains All American’s unsolicited proposal. In particular, the SemGroup Board believes that its long-term strategic plan, including some near-term construction at Cushing, OK, as well as the following contemplated initiatives, will deliver substantial value to its stockholders:

  • The pending contribution of its SemStream ®, L.P. business into NGL Energy Partners LP which is expected to enhance SemGroup's investment in natural gas liquids, create additional opportunities for growth and strengthen SemGroup's financial profile through increased earnings;
  • Increasing capacity at its gas processing facilities in northern Oklahoma; and
  • The planned Master Limited Partnership reorganization which is intended to provide a more tax-efficient entity that will be well positioned to create additional value through organic growth projects and acquisitions.

The SemGroup Board takes its fiduciary duties very seriously and is willing to consider any transaction that reflects the full and fair value of SemGroup's current business and future prospects.

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