Energy Transfer Partners To Acquire Susser In $1.8 Bln Cash, Unit Deal

(RTTNews) - Energy Transfer Partners, L.P. (ETP) Monday said it has entered into a definitive merger agreement to acquire Susser Holdings Corp. (SUSS) in a unit and cash transaction valued at a total consideration of about $1.8 billion. Susser stock added 14 percent in pre-market activity

By acquiring Susser, Energy Transfer Partners or ETP will own the general partner interest and the incentive distribution rights in Susser Petroleum Partners LP (SUSP), around 11 million SUSP common units, and SUSS' existing retail operations, consisting of 630 convenience store locations.

Under the terms of the merger agreement, the shareholders of Susser will have the option to elect to receive $80.25 in cash or 1.4506 ETP common units, or a combination of both, for each share held.

The shareholder election is subject to proration to ensure that aggregate cash paid and common units issued will each represent 50 percent of the aggregate merger consideration.

ETP said that considering the capital appreciation embedded in the stock price of Susser, the receipt of ETP units on a tax deferred basis should be attractive to long-term Susser shareholders.

The deal is expected to create a strong and diversified stand-alone retail business that provides significant value and synergy opportunities and a platform for future growth.

Transaction is immediately accretive to distributable cash flow for ETP. It is expected to be credit ratings neutral. Each additional step in the overall action plan is expected to be incrementally cash flow accretive to ETP.

The merger agreement has been unanimously approved by the Boards of Directors of ETP and SUSS.

ETP has entered into a support agreement with shareholders representing 10 percent of the outstanding shares of Susser. These shareholders have agreed to vote their shares in favor of the merger and to elect to receive 100 percent ETP common units as their consideration.

Susser currently operates 630 retail convenience stores that sell nationally or regionally branded gasoline or sell gasoline under the "Stripes" brand.

Through these retail stores and its fuel distribution network, Susser is also one of the largest non-refiner suppliers of motor fuel in Texas with 1.6 billion gallons sold in 2013.

Sam Susser, Chairman and CEO of Susser, said, ''The combination with Energy Transfer Partners and Sunoco is the right next step for Susser Holdings and delivers significant value for Susser Holdings shareholders. This transaction also enables our shareholders who elect ETP units to participate in the future growth of the retail business."

The addition of Susser to the Sunoco network of over 5,000 retail stores, primarily on the East Coast, broadens Sunoco's geographic footprint and gives it an exceptional base in Texas and the surrounding states.

The pro-forma business will have strong fuel and retail capabilities that are expected to generate sustained earnings growth over time.

Overall, synergy opportunities are expected to exceed $70 million annually from fuel, merchandising and improved "buying power" reflecting economies of scale.

Those commercial and operational synergies are expected to be realized within 6 - 12 months after closing. Additional savings are also likely as systems and processes from both businesses are consolidated.

Bob Owens, President and Chief Executive Officer of Sunoco, Inc. will serve as the President and CEO of the combined businesses, reporting to Kelcy Warren, Chairman and CEO of ETP. Sam Susser will continue as Chairman of SUSP.

SUSP will continue to be traded on the New York Stock Exchange as a separate publicly traded master limited partnership and maintain its current headquarters in Houston, Texas.

ETP closed down 0.1 percent on Friday at $55.80. SUSS, which settled lower by 2.1 percent at $57.03, is adding 14 percent in pre-market activity at $65.