As a part of its “Just Vote No” Campaign against the merger between ONEOK, Inc. and Magellan Midstream Partners, Energy Income Partners (EIP) has launched www.votemmp.com, a website in protest of the merger.
EIP, the fourth largest shareholder in Magellan Midstream Partners, remains steadfast in its stance against the proposed merger.
In a press release EIP said, "This isn't a merger that will create a better company; it's trading the excellence of a top-tier company for a mediocre one.”
EIP cites concerns surrounding industrial logic and failure to explore strategic alternatives as issues they have with the merger.
EIP also feels that the deal generates trivial synergies that are more than offset by additional interest charges related to the debt to consummate the deal. Financial projections in the S-4 also show the annualized return on ONEOK's new growth capital invested is just 5%, or that the base business EBITDA is declining. These factors negate arguments that the combined company offers either diversification or a better future than a stand-alone Magellan.
EIP called the merger a “clear case of 'diworsification',” or adding assets to a portfolio simply for the sake of diversification without considering whether those assets will actually benefit the overall investment strategy.
Recommended Reading
Valaris’ 1Q Sets Positive Tone for Offshore
2024-05-06 - Coming out of first-quarter 2024, drilling contractor Valaris expects a sustained upcycle for the offshore drilling industry supported by demand growth, OPEC+ production cuts and supportive commodity prices.
Will the Ends Justify the Means for W&T Offshore?
2024-03-11 - After several acquisitions toward the end of 2023, W&T Offshore executives say the offshore E&P is poised for a bounce-back year in 2024.
Aramco Reports Second Highest Net Income for 2023
2024-03-15 - The year-on-year decline was due to lower crude oil prices and volumes sold and lower refining and chemicals margins.
Diamondback Stockholders All in for $26B Endeavor Deal
2024-04-29 - Diamondback Energy shareholders have approved the $26 billion merger with Endeavor Energy Resources.
Uinta Basin: 50% More Oil for Twice the Proppant
2024-03-06 - The higher-intensity completions are costing an average of 35% fewer dollars spent per barrel of oil equivalent of output, Crescent Energy told investors and analysts on March 5.