Plains All American Pipeline, L.P. (NYSE: PAA)
today announced that it has entered into a definitive agreement and plan
of merger (the "Merger Agreement") with PAA Natural Gas Storage, L.P.
("PNG") that provides for a merger whereby PNG will become a
wholly-owned subsidiary of PAA, through a unit-for-unit exchange (the
"Merger"). Under the terms of the Merger Agreement, PNG's public
unitholders will receive 0.445 common units of PAA per PNG common unit
surrendered pursuant to the Merger Agreement, plus cash in lieu of any
fractional common units of PAA otherwise issuable in the Merger.
The transaction is expected to result in approximately 14.7 million
additional common units being issued by PAA. In connection with the
closing of the Merger, the owners of PAA's general partner have agreed
to reduce their incentive distribution rights under PAA's Agreement of
Limited Partnership by $12 million in each of 2014 and 2015, $10 million
in 2016 and $5 million per year thereafter.
The terms of the Merger Agreement were approved by the Conflicts
Committee of the board of directors of the general partner of PNG (the
"Conflicts Committee"), who negotiated the terms on behalf of PNG. The
Conflicts Committee is comprised solely of independent directors. In
addition, Evercore acted as financial advisor to the Conflicts Committee
and delivered a fairness opinion to the Conflicts Committee in
connection with the transaction.
The closing of the Merger is subject to the satisfaction of certain
conditions, including the approval of the Merger and the Merger
Agreement at a special meeting of the unitholders of PNG by the
affirmative vote of holders of a majority of the outstanding PNG common
units (including PNG common units held by PAA) voting as a separate
class and the affirmative vote of holders of a majority of PNG's
outstanding subordinated units voting as a separate class. PAA owns 100%
of the membership interests in the general partner of PNG, 100% of the
outstanding subordinated units of PNG and approximately 46% of the 61.2
million outstanding common units of PNG. Pursuant to the Merger
Agreement, PAA has agreed to vote its common units and subordinated
units in favor of the Merger. The parties anticipate that the Merger
will close in the latter half of the fourth quarter of 2013, and that
the previously announced quarterly distribution of $0.3575 per PNG
common unit payable to holders of record of such units on November 1,
2013 will be paid on November 14, 2013 as scheduled.
This communication does not constitute an offer to sell any securities.
Any such offer will be made only by means of a prospectus forming a part
of an effective registration statement filed with the Securities and
In connection with the proposed Merger, a registration statement of PAA,
which will include a proxy statement and will constitute a prospectus of
PAA, and other materials will be filed with the Securities and Exchange
Commission. 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. When available, 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.
PAA, PNG and certain of their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies
from the unitholders of PNG in connection with the proposed transaction.
Information about the directors and executive officers of the general
partner of PAA is set forth in PAA's Annual Report on Form 10-K for the
year ended December 31, 2012, which was filed with the Securities and
Exchange Commission on February 27, 2013. Information about the
directors and executive officers of the general partner of PNG is set
forth in PNG's Annual Report on Form 10-K for the year ended December
31, 2012, which was filed with the Securities and Exchange Commission on
February 27, 2013. These documents can be obtained without charge at the
Securities and Exchange Commission's website indicated above. Additional
information regarding the interests of these participants may be
obtained by reading the proxy statement/prospectus regarding the
proposed transaction when it becomes available.
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.
Except for historical information contained herein, the statements
contained herein 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 Commission.
for Plains All American Pipeline, L.P.
Roy I. Lamoreaux,
713-646-4222 or 800-564-3036
Director, Investor Relations