Plains All American Pipeline, L.P. (NYSE: PAA)
today announced that it has submitted a proposal to the independent
directors of the board of directors of the general partner of PAA
Natural Gas Storage, L.P. (NYSE: PNG) to acquire all of PNG's
outstanding publicly-held common units through a unit-for-unit exchange.
PAA is proposing consideration of 0.435 common units of PAA for each
issued and outstanding publicly-held PNG common unit in a transaction
that would be structured as a merger of PNG with a wholly-owned
subsidiary of PAA. The proposed consideration represents a value per PNG
common unit of $22.74 based on the trailing 10-day average closing price
of PAA's common units through August 26, 2013.
"While PAA shares PNG's positive views about the intermediate to long
term outlook for natural gas storage, it is difficult to predict the
timing and extent of a recovery in natural gas storage market
conditions. Accordingly, it is clear that the next several years will be
challenging for PNG on a stand-alone basis," said Greg L. Armstrong,
Chairman and CEO of PAA. "We believe that the proposal provides an
attractive opportunity for PNG's common unitholders to realize a value
that reflects an appropriate balance between the intermediate to long
term value of PNG's storage business and the uncertainty associated with
a near-term challenging environment."
The proposed transaction is subject to the negotiation and execution of
a definitive agreement and approval of such definitive agreement and the
transactions contemplated thereunder by PAA's board of directors, a
conflicts committee to be established by the board of directors of PNG
and the unitholders of PNG. There can be no assurance that any such
approvals will be forthcoming, that a definitive agreement will be
executed or that any transaction will be consummated.
Plains All American Pipeline, L.P. is a publicly traded master limited
partnership engaged in the transportation, storage, terminalling and
marketing of crude oil and refined products, as well as in the
processing, transportation, fractionation, storage and marketing of
natural gas liquids. Through its general partner interest and majority
equity ownership position in PNG, PAA owns and operates natural gas
storage facilities. PAA is headquartered in Houston, Texas.
This communication does not constitute an offer to sell any securities.
Any such offer will be made only by means of a prospectus, and only if
and when a definitive agreement has been entered into by PAA and PNG,
pursuant to a registration statement filed with the Securities and
If PNG agrees to a transaction with PAA and executes a definitive
agreement, a registration statement of PAA, which will include a PNG
proxy statement and a PAA prospectus, and other materials will be filed
with the Securities and Exchange Commission. If and when applicable,
investors and security holders are urged to carefully read the documents
filed with the Securities and Exchange Commission regarding the proposed
transaction when they become available, because they will contain
important information about PAA, PNG and the proposed merger. If and
when applicable, investors and security holders may obtain a free copy
of the proxy statement/prospectus and other documents containing
information about PAA and PNG, without charge, at the Securities and
Exchange Commission's website at www.sec.gov.
Except for historical information contained herein, the statements
contained herein related to the transactions described in PAA's proposal
are forward-looking statements that involve certain risks and
uncertainties that could cause actual results to differ materially from
the results anticipated in the forward-looking statements, including the
risk that the proposed transaction is not consummated at all or on the
initial terms proposed. Various risks relating to PAA and PNG are
described in their respective filings with the Securities and Exchange
Plains All American Pipeline, L.P.
Roy I. Lamoreaux, 713/646-4222
Director, Investor Relations