The Country Caller takes a look at the deal offered by Cheniere Energy to Cheniere Partners
Cheniere Energy, Inc (NYSEMKT:LNG), the US natural gas exporter, in a press release today, indicated merging with Cheniere Energy Partners.
The current stake of Cheniere in Cheniere Partners is around 80.1%. However, now with the latest development, the US-based natural gas exporter is seeking to augment this stake. As mentioned in the press release the company is now proposing a consideration of its 0.5049 shares for each share that is held by Cheniere Partners and that are publically traded and outstanding.
Cheniere seems to be highly optimistic and bullish on this proposed merger with Cheniere Partners. The company is willing to offer $21.90 of every common share that is held by Cheniere Partners. As mentioned in the press release that when the offered price is compared with the 30 day average of Cheniere Energy Partners LP/ Cheniere Energy, it would represent a premium of 7%.
Cheniere has managed to submit the proposal to the board of directors of Cheniere Partners. In order for the matter to be approved, considerable negotiation is required. The President and CEO of Cheniere Energy, Jack Fusco in the press release outlined some of the reasons why he felt that the deal was important.
Mr. Fusco mentioned that if the deal was approved, it would bring about a great deal of benefits to Cheniere Partners. He indicated that: “We believe the proposed transaction is attractive to investors in Cheniere Partners Holdings who, as new Cheniere Energy shareholders, would have the opportunity to participate in the future success of the entire Cheniere complex.” In addition, he also indicated that the shareholders of Cheniere Partners would receive a lucrative premium which would further enhance the trading liquidity of their investments.