UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 30, 2011
ENERGY TRANSFER PARTNERS, L.P.
(Exact name of Registrant as specified in its charter)
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| Delaware
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1-11727
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73-1493906 |
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification Number) |
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3738 Oak Lawn Avenue
Dallas, TX 75219 |
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(214) 981-0700
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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| Item 1.01. |
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Entry into a Material Definitive Agreement. |
On July 4, 2011, Energy Transfer Partners, L.P., a Delaware limited partnership (the
“Partnership”), entered into an agreement and plan of merger (the “Citrus Merger Agreement”) with
Energy Transfer Equity, L.P., a Delaware limited partnership (“ETE”). Pursuant to the Citrus
Merger Agreement, and upon the consummation of ETE’s merger (the “ETE/SUG Merger”) with Southern
Union Company (“SUG”) under the terms of that certain Amended and Restated Agreement and Plan of
Merger dated July 4, 2011 (the “ETE/SUG Merger
Agreement”), ETE will contribute to the Partnership an indirect 50% interest in
Citrus Corp., an entity that owns 100% of the Florida Gas Transmission pipeline system
(the “Citrus Dropdown”). The Citrus
Dropdown will be effected through the merger of Citrus ETP Acquisition, L.L.C., a Delaware limited
liability company and wholly owned subsidiary of the Partnership (“ETP Merger Sub”), with and into
CrossCountry Energy, LLC, a Delaware limited liability company that indirectly owns a 50% interest
in Citrus Corp. (“CrossCountry”). In exchange for the interest in Citrus Corp., ETE will receive
approximately $1.9 billion, consisting of $1.881 billion in cash and $19.0 million of Partnership
common units, with the value of such common units based on the volume-weighted average trading
price for the ten consecutive trading days ending immediately prior to the date that is three
trading days prior to the closing date of the Citrus Dropdown. ETE owns the Partnership’s general
partner, all of the Partnership’s incentive distribution rights and approximately 50.2 million of
the Partnership’s common units. In order to increase the expected accretion to be derived from the
Citrus Dropdown, ETE has agreed to relinquish its rights to approximately $220 million of the
incentive distributions from the Partnership that ETE would otherwise be entitled to receive over
16 consecutive quarters following the closing of the transaction.
The Conflicts Committee (the “ETP Conflicts Committee”) of the Board of Directors (the “ETP
Board”) of Energy Transfer Partners, L.L.C. (“ETP LLC”), the general partner of the Partnership’s
general partner, consisting of three of the ETP Board’s independent directors, determined that the
Citrus Dropdown is fair and reasonable to, and in the best interest of, the Partnership and the
unaffiliated unitholders of the Partnership and approved the Citrus Dropdown. A special committee
and a conflicts committee of the Board of Directors (the “ETE Board”) of LE GP, LLC, the general
partner of ETE, recommended approval of the Citrus Dropdown to the ETE Board and the ETE Board
approved the Citrus Dropdown.
The Citrus Merger Agreement includes customary representations, warranties and covenants of
the Partnership and ETE (including representations, warranties and covenants relating to
CrossCountry and certain of its affiliates). Subject to certain exceptions, ETE has also agreed
not to, among other things, amend, supplement, restate or otherwise modify the ETE/SUG Merger
Agreement or agree to, grant or permit to exist any waiver of a condition, covenant or other
provision in the ETE/SUG Merger Agreement if such waiver would be adverse to the Partnership’s
interest in the Citrus Dropdown or would be reasonably likely to prevent or materially delay the
consummation of the transactions contemplated by the Citrus Merger Agreement. Additionally,
without the Partnership’s prior approval, ETE has agreed not to approve certain actions by
CrossCountry and certain of its affiliates.
Consummation of the Citrus Dropdown is subject to customary conditions, including, without
limitation: (i) the consummation of the ETE/SUG Merger pursuant to the terms of the ETE/SUG Merger
Agreement, (ii) the receipt by the Partnership of any necessary waivers or amendments to its credit
agreement, (iii) the amendment of the Partnership’s partnership agreement to reflect the agreed
upon relinquishment by ETE of incentive distributions from the Partnership discussed above, and
(iv) the absence of any order, decree, injunction or law prohibiting or making the consummation of
the transactions contemplated by the Citrus Merger Agreement illegal. The Citrus Merger Agreement
contains certain termination rights for both ETE and the Partnership, including, among others, the
right to terminate if the Citrus Dropdown is not completed by December 31, 2012 or if the ETE/SUG
Merger Agreement is terminated.
Pursuant to the Citrus Merger Agreement, ETE has granted the Partnership a right of first
offer with respect to any disposition of Southern Union Gas Services, a subsidiary of SUG that owns
and operates a natural gas gathering and processing system serving the Permian Basin in West Texas
and New Mexico.
A copy of the Citrus Merger Agreement is filed as Exhibit 2.1 to this report and is
incorporated herein by reference. The foregoing description of the Citrus Merger Agreement does not
purport to be complete and is qualified in its entirety by reference to the Citrus Merger
Agreement.
The Citrus Merger Agreement has been included to provide security holders with information
regarding its terms. It is not intended to provide factual information about the Partnership, ETE,
CrossCountry or any of its affiliates and should not be relied on by any other person or entity for
any purposes. The Citrus Merger Agreement contains representations and warranties of the
Partnership, ETE, CrossCountry and its affiliates made to each other as of specific dates. The
assertions embodied in those representations and warranties were made solely for purposes of the
contract between the Partnership and ETE and may be subject to important qualifications and
limitations agreed to by the Partnership or ETE in connection with the negotiated terms, which
qualifications and limitations are not necessarily reflected in the Citrus Merger Agreement.
Moreover, some of those representations and warranties may not be accurate or complete as of any
specified date, may be subject to a contractual standard of materiality different from those
generally applicable to unitholders or may have been used for purposes of allocating risk between
the Partnership and ETE rather than establishing matters as fact.
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| Item 3.02 |
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Unregistered Sale of Equity Securities. |
The information set forth under Item 1.01 above is incorporated herein by reference. The
private placement of common units issued to ETE pursuant to the Citrus Merger Agreement is being
made in reliance upon an exemption from the registration requirements of the Securities Act of 1933
pursuant to Section 4(2) thereof as well as Regulation D thereunder.
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| Item 5.02. |
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Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers. |
In order to serve on the special committee of the ETE Board, on and effective as of June 30,
2011, each of Mr. Ray C. Davis, Mr. K. Rick Turner and Mr. David R. Albin resigned from the ETP
Board. Messrs. Davis, Turner and Albin are not resigning because of a disagreement with ETP LLC,
Energy Transfer Partners GP, L.P. or the Partnership on any matter relating to the Partnership’s
operations, policies or practices.
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| Item 9.01. |
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Financial Statements and Exhibits. |
(d) Exhibits.
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| Exhibit Number |
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Description of the Exhibit |
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2.1 |
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Agreement and Plan of Merger, dated as of July 4, 2011, by
and between Energy Transfer Partners, L.P. and Energy
Transfer Equity, L.P. |