Energy Transfer Equity LP (NYSE:ETE) announced that it has entered into a definitive agreement with Energy Transfer Equity, L.P. (NYSE:ETP) in connection with a private placement of common units representing limited partner interests in ETP pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. The closing of the transaction, which is scheduled to occur on January 12, 2017, is conditioned upon the closing of ETE’s previously announced $580 million private placement, or PIPE, financing transaction.
Upon the closing of the transaction with ETE, ETP will receive gross proceeds of approximately $568 million in exchange for the issuance to ETE of approximately 15.8 million ETP common units. The purchase price per unit is equal to the volume weighted average trading price of ETP’s common units for the 10 trading day period ending January 5, 2017. ETP intends to use the net proceeds of the transaction to repay existing indebtedness and for general partnership purposes.
The purchase of ETP common units by ETE has been approved by the boards of directors and conflicts committees of both partnerships. (Original Source)
Shares of Energy Transfer Equity are currently falling 1.81% to $19.50, or down $0.36 in pre-market trading Monday. ETE has a 1-year high of $20.05 and a 1-year low of $4. The stock’s 50-day moving average is $17.94 and its 200-day moving average is $16.75.
On the ratings front, Energy Transfer Equity has been the subject of a number of recent research reports. In a report released today, Bernstein Research analyst Jean Ann downgraded ETE to Hold, with a price target of $19, which represents a slight downside potential from current levels. Separately, on January 6, RBC’s T J Schultz reiterated a Buy rating on the stock and has a price target of $22.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Jean Ann and T J Schultz have a yearly average return of 30.8% and 9.5% respectively. Ann has a success rate of 100% and is ranked #2440 out of 4350 analysts, while Schultz has a success rate of 78% and is ranked #50.
Overall, 2 research analysts have assigned a Hold rating and 3 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $20.33 which is 2.4% above where the stock closed last Friday.
Energy Transfer Equity LP provides natural gas pipeline transportation and transmission services. The company operates its business in seven segments: Interstate Transportation and Storage, Midstream, NGL Transportation and Services, Retail Marketing, Investment in Sunoco Logistics, Investment in Regency and Corporate and Other. The Intrastate Transportation and Storage segment includes natural gas transportation pipelines receive natural gas from other mainline transportation pipelines and gathering systems and deliver the natural gas to industrial end-users, utilities and other pipelines. The Midstream segment consists of natural gas gathering, compression, treating, processing and transportation, and is generally characterized by regional competition based on the proximity of gathering systems and processing plants to natural gas producing wells. The NGL Transportation and Services segment engages in processing and fractionating refinery off-gas. The Retail Marketing segment consists of Sunoco, Inc., marketing operations, which sell gasoline and middle distillates at retail and operates convenience stores in 25 states, primarily on the east coast and in the Midwest region of the U.S.