Energy Transfer Partners, L.P. ( NYSE:ETP ) today announced that it has entered into a definitive merger agreement whereby ETP plans to acquire Susser Holdings Corporation (NYSE:SUSS) in a unit and cash transaction valued at a total consideration of approximately $1.8 billion. By acquiring Susser Holdings, ETP will own the general partner (GP) interest and the incentive distribution rights (IDRs) in Susser Petroleum Partners LP (NYSE:SUSP), approximately 11 million SUSP common units (representing approximately 50.2 % of SUSP’s outstanding units), and SUSS’ existing retail operations, consisting of 630 convenience store locations.
Under the terms of the merger agreement, which has been unanimously approved by the Boards of Directors of ETP and SUSS, the shareholders of Susser Holdings will have the option to elect to receive either $80.25 in cash or 1.4506 ETP common units, or a combination of both, for each share held. The shareholder election is subject to proration to ensure that aggregate cash paid and common units issued will each represent 50% of the aggregate merger consideration. Given the capital appreciation embedded in the stock price of Susser Holdings, the receipt of ETP units on a tax deferred basis should be attractive to long-term Susser shareholders.
ETP has entered into a support agreement with shareholders representing 10% of the outstanding Susser Holdings’ shares, pursuant to which such shareholders have agreed to vote their shares in favor of the merger and to elect to receive 100% ETP common units as their consideration, subject to the same pro ration as all other shareholders.
Susser Holdings has achieved a remarkable track record of sustained earnings growth and currently operates 630 retail convenience stores that sell either nationally or regionally branded gasoline or sell gasoline under the “Stripes” brand. Through these retail stores and its fuel distribution network, Susser Holdings is also one of the largest non-refiner suppliers of motor fuel in Texas with 1.6 billion gallons sold in 2013. The focus of Susser Holdings in Texas and its neighboring states has allowed it to capitalize on the strong Texas economy, as well as the demographic changes occurring in these markets.