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Tallgrass Energy Shares Rise 20% on Blackstone Partners Acquisition Deal

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Shares of Tallgrass Energy LP traded 20% higher after the firm advised that it entered into a definitive merger agreement with Blackstone Infrastructure Partners to acquire all of the company's publicly held outstanding class A shares for $22.45 per share in cash.

Midstream energy infrastructure company Tallgrass Energy LP (TGE:NYSE) today announced that it has entered into a definitive merger agreement with Blackstone Infrastructure Partners (BIP) and its investment partners Enagas, GIC, NPS and USS to acquire all of the publicly held outstanding Class A Shares of TGE for $22.45 in cash per share.

Tallgrass Energy stated that its Board of Directors' Conflicts Committee has already unanimously approved the transaction and determined it to be in the best interests of the company and its public shareholders.

The report indicated that the transaction is expected to close in Q2/20 subject to satisfaction of customary conditions, including approval of the merger by holders of a majority of the outstanding Tallgrass Class A and Class B shares. This majority is inclusive of the approximately 44% of the total Class A and Class B shares that are already held by the BIP consortium sponsors. The BIP sponsors stated that they expect to fund the bulk of the purchase of the Class A Shares with approximately $3 billion of equity with the remainder of the transaction funding to be financed by debt.

Tallgrass Energy LP is a growth-oriented midstream energy infrastructure company headquartered in Leawood, Kansas. The firm indicated that "it operates across 11 states with transportation, storage, terminal, water, gathering and processing assets that serve some of the nation's most prolific crude oil and natural gas basins."

Blackstone is one of the world's largest investment firms with its asset management businesses having over $554 billion in assets under management. The firm stated that infrastructure is one of its most active investment areas, and that over the last 15 years, it has invested more than $45 billion globally in infrastructure-related projects.

Tallgrass Energy started off the day with a market capitalization of about $5.1 billion with approximately 281.3 million shares outstanding. TGE shares opened 21% higher today at $22.17 (+$3.88, + 21.21%) compared to yesterday's $18.29 closing price. The stock has traded today between $22.09 and $22.18 per share and at present is trading at $22.10 (+$3.81, +20.86%).


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