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PVR Partners, L.P. To Be Acquired By Regency Energy Partners LP For $28.68 Per Unit

Stocks in this article: PVRRGP

SAN DIEGO and RADNOR, Pa., Oct. 10, 2013 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP are investigating the acquisition of PVR Partners, L.P. (NYSE: PVR) by Regency Energy Partners LP (NYSE: RGP).  

(Logo: http://photos.prnewswire.com/prnh/20130103/MM36754LOGO)

Learn more about our investigation on our Shareholder Rights Blog: http://www.robbinsarroyo.com/shareholders-rights-blog/pvr-partners-l-p/

On October 10, 2013, Regency and PVR announced that their respective boards of directors have unanimously approved a definitive merger agreement, pursuant to which Regency will acquire PVR.  Under the terms of the agreement, holders of PVR units will receive 1.02 common units of Regency – valued at $28.68 - for each PVR unit held, as well as a one-time cash payment at closing of the merger estimated at approximately $40 million in the aggregate.  The transaction is expected to close in the first quarter of 2014.  

Is the Merger Best for PVR and Its Unit Holders?

Robbins Arroyo LLP's investigation focuses on whether the board of directors at PVR is undertaking a fair process to obtain maximum value and adequately compensate PVR's unit holders in the merger.  As an initial matter, the $28.68 consideration represents a one month premium of only 15.93% based on PVR's closing price on September 10, 2013.  That premium is significantly below the median one-month premium of over 37% for comparable transactions in the last three years. 

Moreover, PVR is currently experiencing success and growth in its business prospects, as indicated in its July 24, 2013 press release, announcing the company's financial results for the second quarter 2013, reporting an increase in Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") and Distributable Cash Flow ("DCF").

  • PVR reported adjusted EBITDA of $76.1 million for the quarter, an increase of 33.5% compared to the same quarter in 2012.
  • PVR reported $49 million DCF, an increase of 48.9% compared to the same quarter in 2012. 

In announcing these results, Bill Shea, President and CEO of PVR's general partner, indicated that "results for the second quarter were below our expectations ...," an interesting comment considering the company's improved financial results over the same quarter in the prior year, and implying that the company is poised for even greater success if it can hammer out its well connection delays as noted in its earnings release. 

Given these facts, Robbins Arroyo LLP is examining PVR's board of directors' decision to sell the company to Regency now rather than allow unit holders to continue to participate in the company's continued success and future growth prospects, and whether they are seeking to benefit themselves.

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