Stonepeak acquires Teekay LNG
Teekay LNG Partners LP and Stonepeak, a leading alternative investment firm specializing in infrastructure and real estate assets, have announced that they have entered into a deal and plan to merge.
Under the merger agreement, the investment vehicles managed by Stonepeak will acquire (a) all issued and outstanding common units representing the limited partner units of Teekay LNG, including approximately 36.0 million common units held. by Teekay Corporation, and (b) 100% ownership of Teekay in the general partner of Teekay LNG, Teekay GP LLC, which includes an economic interest equivalent to approximately 1.6 million common units of Teekay LNG, for 17.00 US $ per ordinary unit or equivalent of ordinary unit of cash, representing an enterprise value of US $ 6.2 billion, including and proportional net debt of the joint venture, and US $ 1.5 billion in equity ordinary shares. The acquisition price of US $ 17.00 per unit represents a premium of 8.3% over the closing price of ordinary Teekay LNG units on October 1, 2021 and premiums of 12.3% and 17.5% compared to the volume-weighted average price of Teekay LNG’s ordinary shares over the past 60 and 180 days, respectively.
The transaction is the result of a review by Teekay GP’s board of directors of the strategic alternatives available to Teekay LNG. Teekay GP’s Conflict Committee, composed of independent directors and advised by its own independent legal and financial advisors, determined that the transaction was desirable and in the best interests of Teekay LNG and its unaffiliated unitholders of Teekay and unanimously approved the transaction. In considering its recommendation, the Teekay GP Conflict Committee was advised by Houlihan Lokey Capital, Inc. Subsequently, acting on the recommendation of the Conflict Committee, the Teekay GP Board of Directors approved to unanimously the transaction and recommended that all holders of ordinary Teekay LNG units vote in favor of the merger agreement under the conditions presented.
“This is a transformative transaction for Teekay LNG that will allow existing unitholders to achieve an attractive valuation and immediate liquidity at close,” commented Mark Kremin, President and CEO of Teekay Gas Group Ltd . “Under Stonepeak ownership, we expect Teekay LNG to have better access to competitively priced capital for fleet renewal and potential future growth in the next phase of our development, which was not available on public capital markets for many years. We are delighted to partner with Stonepeak and look forward to continuing to strengthen our market leadership positions, while maintaining our strong focus on operational excellence. We believe that the combination of our existing management and operations teams with Stonepeak, which has a long history of investing in energy infrastructure, will provide substantial benefits to our customers, employees, joint venture partners and capital providers. in the future. “
“Stonepeak has long recognized the growing global demand for LNG and the importance of natural gas as a transitional fuel, especially as the world continues to move towards cleaner energy sources,” said James Wyper, Senior Managing Director of Stonepeak. “With this transaction, we have an exciting opportunity to invest in a critical energy transition infrastructure business in the form of Teekay LNG’s modern, high-quality vessel fleet and long-term stable customer contracts. We are particularly excited to partner with the top Teekay LNG management team to deliver a cheaper, cleaner and more reliable energy supply to all regions of the world, especially in Asia where we have been active investors in the transition. in progress towards cleaner and renewable fuels. “
“Since the initial public offering in 2005, Teekay has made Teekay LNG the third largest owner and independent operator of LNG carriers in the world, with one of the largest and most diverse portfolios of contracts to long term with key players in the LNG industry, ”commented Kenneth Hvid, President and CEO of Teekay. “We believe that this transaction represents a unique opportunity to monetize our position in Teekay LNG while achieving an attractive return on investment for Teekay and for ordinary unitholders of Teekay LNG. This transaction also gives Teekay greater financial flexibility to leverage its existing operating franchise and advanced capabilities to pursue attractive investment opportunities both in the shipping industry and potentially in new markets. and adjacent, which we expect to be dynamic as the world pushes for greater energy diversification.
The transaction has been approved by the board of directors of Teekay GP and Teekay, including unanimous approval from the Teekay GP dispute committee, and is expected to be finalized by the end of 2021. The transaction remains subject to the approval of a majority of Teekay. holders of ordinary LNG units at an extraordinary meeting to be held in connection with the transaction, and the satisfaction or waiver of certain customary closing conditions. Teekay, which currently owns approximately 41% of the outstanding common shares of Teekay LNG, has entered into a voting and support agreement to vote in favor of the merger.
As part of the transaction, Teekay will transfer to Teekay LNG the ownership of the management services companies that currently operate Teekay LNG and some of its joint ventures under existing management services contracts.
Morgan Stanley & Co. LLC acts as financial advisor and Squire Patton Boggs (US) LLP and Perkins Coie LLP acts as legal advisers to Teekay LNG. Houlihan Lokey Capital, Inc. is acting as financial advisor and Potter Anderson & Corroon LLP is acting as legal advisor to the Teekay GP Conflict Committee. DNB Markets acts as financial advisor and Simpson Thacher as legal advisor to Stonepeak.
Read the article online at: https://www.lngindustry.com/lng-shipping/05102021/stonepeak-to-acquire-teekay-lng/