Martin Midstream Partners, Martin Resource Management Bin Merger Plan

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Martin Midstream Partners, Martin Resource Management Bin Merger Plan

Martin Midstream Partners LP (MMLP) and investor Martin Resource Management Corp. (MRMC) have mutually terminated a deal under which MRMC would buy MMLP common units it did not already own. The cancellation comes after two other investors opposed the takeover by MRMC, which owns the 100 percent general partnership interest in MMLP. The two other […]

Martin Midstream Partners LP (MMLP) and investor Martin Resource Management Corp. (MRMC) have mutually terminated a deal under which MRMC would buy MMLP common units it did not already own.

The cancellation comes after two other investors opposed the takeover by MRMC, which owns the 100 percent general partnership interest in MMLP. The two other investors, Nut Tree Capital Management LP and Caspian Capital LP, had lost a higher-priced counter-offer.

Under the transaction agreed between MMLP and MRMC, each non-MRMC-owned common unit representing a limited partnership interest in MMLP would be converted into cash. MMLP was to survive as a wholly owned subsidiary of MRMC.

MRMC initially proposed a purchase price of $3.05 per unit. Nut Tree and Caspian, which own limited partnership interests in MMLP responded with a counter-offer to buy the common units targeted in MRMC’s proposal for $4 a unit.

Nut Tree and Caspian later raised their proposal to $4.5 per unit and expressed willingness to increase their offer further, according to regulatory filings.

However, on October 3, MMLP announced a definitive agreement under which MRMC would acquire all MMLP common units it did not already own for $4.02 per unit, rebuffing Nut Tree and Caspian’s increased offer.

According to statements from MMLP, its purchase by a party other than MRMC would likely necessitate the purchase of its general partner, which is owned by MRMC. MMLP has said it could not make a sale transaction with another party because MRMC had no intention of selling the general partner.

MRMC owns about 15.7 percent of MMLP common units, while Nut Tree and Caspian have “economic exposure” of around 13.2 percent of MMLP common units, according to information shared with the United States Securities and Exchange Commission.

Announcing the termination of the takeover agreement with MRMC, MMLP said it would “continue to operate as a standalone publicly traded company”.

Bob Bondurant, president and chief executive of MMLP’s general partner, said, “We appreciate the feedback we have received from unitholders during our extensive outreach and engagement over the last several weeks”.

“We greatly value unitholders’ perspectives and are pleased that unitholders have confidence in the future of MMLP as a standalone company”, Bondurant added.

“We will continue to focus on executing our long-term strategy, including strengthening the balance sheet through debt reduction and improving operating results, to create value for unitholders”.

Focusing on the United States Gulf Coast, MMLP offers terminaling, processing and storage services for crude oil and petroleum products. It also offers land and marine transport for oil, chemicals and other products. MMLP also distributes natural gas liquids and offers blending and packaging services for lubricants and grease, as well as manufactures sulfur and sulfur-based products.

Kilgore, Texas-based MRMC distributes asphalt, diesel fuel, fuel oil and naphthenic lubricants. “MRMC markets over 250 million gallons of diesel fuel and lubricants per year along the Gulf Coast and over 1.5 million barrels of naphthenic lubricants and base oils per year throughout the United States”, it says on its website.

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