A proposal has been made to take the Kansas City-based pipeline company, Tallgrass Energy, LP private. The company’s board of directors announced it had received a non-binding preliminary proposal from Blackstone Infrastructure Partners, its partners and respective affiliates.
The proposal is for Blackstone to acquire all of Tallgrass Energy’s outstanding Class A shares for $19.50 per share in cash. Blackstone pointed out the offer is a nearly 35.9% premium oveer Tallgrass Energy’s closing price on Aug. 27, 2019. It also represents a 12% premium to the volume weighted average price in the past 30 calendar days.
Blackstone and its sponsors already hold a nearly 44.2% economic interest in the company.
“We expect that the Transaction would be structured as a merger, through which a Sponsors-controlled acquisition vehicle would merge into Tallgrass, with Tallgrass surviving the merger,” wrote Wallace C. Henderson, Blackstone’s Senior Managing Director in the letter to the board.
The Board at Tallgrass stated it intends to form a conflicts committee consisting of independent directors of the Board to consider the proposal.
The proposal constitutes only a preliminary indication of interest by the sponsors and does not constitute any binding commitment with respect to the proposed transaction or any other transaction.