TPC Group Files Preliminary Proxy Statement Regarding Merger Agreement With First Reserve Corporation And SK Capital Partners
HOUSTON, Sept. 10, 2012 (GLOBE NEWSWIRE) -- TPC Group Inc. (Nasdaq:TPCG), a leading fee-based processor and service provider of value-added products derived from niche petrochemical raw materials, today announced that it has filed preliminary proxy materials with the Securities and Exchange Commission ("SEC") in connection with the definitive merger agreement between TPC Group and investment funds sponsored by First Reserve Corporation and SK Capital Partners. Under the terms of the agreement, previously announced on August 27, 2012, TPC Group stockholders are eligible to receive $40.00 per share in cash, which represents a 20 percent premium to TPC Group's closing stock price on July 24, 2012, the last unaffected trading day prior to media reports of a possible acquisition of TPC Group.
The TPC Group Board of Directors encourages all stockholders to read the preliminary proxy statement and its annexes, including the merger agreement, carefully and in its entirety. The following information is derived from the preliminary proxy statement.
Transaction Preceded by Comprehensive Review Process Conducted by an Independent Special Committee
- The Board's decision to adopt and approve the merger agreement, and to recommend its adoption to stockholders, was the culmination of a comprehensive strategic review process to maximize value for TPC Group's stockholders.
- The review was conducted by a Special Committee formed in early 2012 composed of four independent directors, including representatives of two of the Company's largest stockholders, QVT Fund LP, Quintessence Fund L.P. and One East Capital, which hold an aggregate of approximately 21% of the Company's outstanding shares.
- A range of other alternatives were considered, including remaining a standalone company, forming a master limited partnership (or "MLP") and various sale transactions.
- In reviewing both standalone and MLP scenarios, the Special Committee and Board considered the Company's business prospects, growth opportunities and various risks facing the Company, including crude C4 supply and the large capital projects. In addition, they considered the fact that the combined capital costs of the Company's proposed strategic on-purpose isobutylene and butadiene projects (including refurbishing of existing equipment and construction of associated new equipment) would likely be well in excess of the current total market capitalization of TPC Group, necessitating a substantial infusion of new capital. The risks involved in such a substantial financing, as well as the risks involved in executing the projects themselves, were viewed to be significant.
- In evaluating different merger options, the Special Committee and its advisors had contacts with nine other potential strategic and financial acquirers, in addition to First Reserve Corporation and SK Capital Partners.
- After intensive negotiations with First Reserve Corporation and SK Capital Partners – which resulted in a significant price increase over their original proposal – the Special Committee and Board unanimously (with two members of the Board who are also members of management abstaining) concluded that the adoption of the merger agreement was in the best interests of all stockholders and will provide certain and immediate value of $40.00 per share in cash.
- Notably, QVT Fund LP, Quintessence Fund L.P. and One East Capital have executed voting and support agreements providing their commitment to vote in favor of the transaction with First Reserve Corporation and SK Capital Partners. These agreements will terminate if the merger agreement is terminated in order for TPC Group to accept a superior proposal.
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