By Houston Business Journal

SemGroup Corp.â¿¿s rejection of a $1 billion unsolicited proposal from Houstonâ¿¿s Plains All American Pipeline LP (NYSE: PAA) has spurred Plains to take its case to shareholders.

Plains on Monday released to the public a letter it sent the president and chairman of SemGroup expressing disappointment in the boardâ¿¿s rejection of the offer and refusal to discuss the proposal.

⿿Accordingly, we are compelled to take our proposal directly to your stockholders by making the terms of our proposal public,⿝ the letter said. Plains said that since SemGroup⿿s emergence from bankruptcy in November 2009, the company has underperformed and their purchase offer presents a greater value to stockholders.

Plains had offered earlier this month to buy all outstanding shares of SemGroup Corp. (NYSE: SEMG) at $24 per outstanding share in cash, a 16-percent premium to the 10-day average price through Oct. 5. SemGroup is based in Tulsa, Okla.

The deal, if concluded, would create the largest crude storage facility at the delivery hub of Cushing, Okla. Adding SemGroupâ¿¿s five million barrels of tank space to Plainâ¿¿s existing 14.7 million barrels.

⿿We are disappointed that SemGroup⿿s Board of Directors has refused to engage in constructive discussions with us,⿝ said Plains Chairman and CEO Greg Armstrong in the letter.

News of the bid pushed SemGroup shares up $4.71, or 20 percent, to close at $28.27. Plains shares saw a modest gain of $1.11 to close at $65.

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