Energy Transfer Partners, Sunoco Announce $1.94 Bln Dropdown Of Susser Holdings

(RTTNews) - Energy Transfer Partners, L.P. (ETP) and Sunoco LP (SUN) Wednesday reported the dropdown of 100 percent of Susser Holdings Corp. or SHC for $1.94 billion. Additionally, there will be an exchange for 11 million SUN units owned by SHC for another 11 million new SUN units to a subsidiary of ETP.

For the SHC dropdown, SUN will pay to ETP $970 million in cash and issue 22 million SUN units valued at $970 million based on the five-day volume-weighted average price of SUN's common units as of July 14.

Pro forma for this transaction, ETP will remain the largest unitholder of SUN. The transaction is expected to close on August 1.

For ETP, this transaction is expected to be immediately accretive to distributable cash flow for 2015 and beyond. For SUN, the transaction is breakeven with respect to distributable cash flow in 2015 and significantly accretive thereafter.

Simultaneously with this transaction, ETP and Energy Transfer Equity (ETE) have announced a transaction in which ETP will transfer the GP interest and incentive distribution rights or IDR of SUN to ETE in exchange for 21 million ETP units held by ETE.

ETE has also agreed to a 2-year IDR subsidy to ETP through June 30, which replaces an existing, $35 million per annum subsidy that would automatically terminate in the event that ETP transfers the SUN GP interest and IDRs to ETE. The transaction represents a current value of approximately $1.2 billion.