Stonepeak Buys Teekay LNG For $6.2 Billion
New York-based independent investment firm Stonepeak has decided to acquire Teekay LNG Partners in a transaction worth $6.2 billion.
Under the agreement and plan of merger, investment vehicles managed by Stonepeak will acquire all the issued and outstanding common units of Teekay LNG, including around 36 million common units owned by Teekay Corporation, and 100 percent of its ownership in Teekay LNG’s general partner Teekay GP which has an ownership interest of around 1.6 million Teekay LNG common units.
Each common unit will be bought for $17 apiece. The transaction also includes consolidated and proportionate joint venture net debt and $1.5 billion in common unit equity value.
The $17 per unit acquisition price represents a premium of 8.3 percent to the closing price of Teekay LNG’s common units on October 1 and premiums of 12.3 percent and 17.5 percent to the volume-weighted average price of Teekay LNG’s common units over the last 60 and 180 days, respectively.
The transaction has been approved by both Teekay GP and Teekay and by the conflicts committee of Teekay GP with the closing date expected to be near the end of 2021.
The transaction remains subject to approval by Teekay LNG’s common unitholders. Teekay Corporation will transfer to Teekay LNG the ownership of the management services companies that currently deliver operations for Teekay LNG and some of its joint ventures under existing management services contracts.
After the completion of the transaction, the common units of Teekay LNG will be delisted from the New York Stock Exchange. The series A and B preferred units of Teekay LNG are expected to remain outstanding and continue to trade on the NYSE following the completion of the transaction.
It is worth noting that, since the initial public offering in 2005, Teekay LNG has become the world’s third-largest independent LNG carrier owner and operator. Teekay has interests in 47 LNG carriers and 21 mid-size LPG carriers, plus seven multi-gas carriers, according to the statement.
“This is a transformative transaction for Teekay LNG that will enable existing unitholders to realize an attractive valuation and immediate liquidity on closing,” president and CEO of Teekay Gas Group said. “Under Stonepeak’s ownership, we expect Teekay LNG to have improved access to competitively priced capital for both fleet renewal and potential future growth in the next phase of our development, which has not been available through the public equity capital markets for many years.”
“Stonepeak has long recognized the growing global demand for LNG and importance of natural gas as a bridge fuel, particularly as the world continues to shift toward cleaner sources of energy,” senior managing director at Stonepeak James Wyper added.
“Through this transaction, we have an exciting opportunity to invest in a critical energy transition infrastructure business in the form of Teekay LNG’s high-quality, modern fleet of vessels and stable long-term customer contracts,” he concluded.
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