New ETF Book by Larry Connors - Click here to read more
The capital structure simplification plan was approved by 97 percent of unit holders who voted in separate meetings of Magellan Midstream Holdings LP and Magellan Midstream Partners LP. The former company owned the 2 percent general partner interest and incentive distribution rights into the latter, which actually performed the work of fee-based refined petroleum storage and transportation.
"Unit holder approval of the simplification is an important event in Magellan's history that sets the stage for capturing additional growth opportunities for our partnership," Don Wellendorf, CEO of the Tulsa-based firm, said in a statement.
The changes, proposed earlier this year, will save Magellan millions in reporting costs and duplication and also simplify the brand for investors, officials said. Magellan Midstream Holdings unit holders will have each of their shares transferred into 0.6325 units of the partnership.
Magellan Midstream Partners began Sept. 1, 2003, when Williams Energy Partners opted to change its name. Earlier that year, parent Williams Cos. Inc. sold its 54 percent interest to private equity firms Madison Dearborn Partners LLC, Carlyle/Riverstone Global Energy and Power Fund II.
Magellan Midstream Partners now owns and operates more than $2 billion worth of assets, including 80 petroleum products terminals, a 9,400-mile petroleum
products pipeline system and a 1,100-mile ammonia pipeline system.
The partnership spent $250 million to buy a 700-mile Texas pipeline system from bankrupt Longhorn Partners Pipeline LP earlier this year.
Three years after Williams became Magellan, company officials decided to spin off the general partner and incentive distribution rights into the new Magellan Midstream Holdings.
Before Friday's simplification, Holdings gained about 33 percent of the distributable cash flow generated by the partnership.
"Investors in publicly traded GPs recognized the value of the incentive distribution rights (IDRs) typically held by the GP," Magellan investor-relations specialist Paula Farrell said in an e-mailed response to Tulsa World questions.
"The IDRs provide an opportunity to receive a higher percentage of the incremental cash flow paid by the underlying partnership."
Other partnerships lately have opted to simplify their structures to free cash flow, fund acquisitions and reduce reporting duties.
Denver-based Mark West Energy Partners LP merged its general partner into the single partnership last year.
On its last day of trading, Magellan Midstream Holdings closed at $23.24 per unit on the New York Stock Exchange, down 15 cents from Thursday's finish. Magellan Midstream Partners' units closed at $37.01 each Friday, 49 cents lower.
Rod Walton 581-8457 rod.walton@tulsaworld.com
To see more of the Tulsa World, or to subscribe to the newspaper, go to http://www.tulsaworld.com. Copyright (c) 2009, Tulsa World, Okla. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302
© Copyright 2009 The Connors Group, Inc.
