Natural gas transportation and storage partnership
Energy Transfer Partners L.P.
) has agreed to acquire gasoline retailer
Susser Holdings Corp.
) for about $1.8 billion in cash and stock.
BOARDWALK PIPLN (BWP): Free Stock Analysis
ENERGY TRAN PTR (ETP): Free Stock Analysis
SUSSER PETRLEUM (SUSP): Free Stock Analysis
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Corpus Christi, Texas-based Susser Holdings operates more than
600 Stripes and Sac-N-Pac retail stations - selling gasoline,
diesel fuel and convenience store items - with a large footprint
across Texas, New Mexico and Oklahoma. The company also provides
restaurant service at around 370 of its Stripes locations, mainly
under its Laredo Taco brand. Additionally, Susser Holdings
controls a master limited partnership,
Susser Petroleum Partners L.P.
), one of the largest wholesale fuel distributors in Texas.
The transaction has been okayed by the boards of both companies
but awaits regulatory and shareholder approval. We expect the
buyout to conclude in the third quarter following which Energy
Transfer will get the general partner interest and the incentive
distribution rights in Susser Petroleum Partners and 50.2% of its
common units, plus Susser Holdings' retail operations.
Should the deal go through, Energy Transfer Partners will be able
to expand its existing network of 5,000 gas stations - mostly
along the East Coast - that came with the $5.3 billion
acquisition of Philadelphia-based refining and petroleum product
marketing company Sunoco Inc. back in 2012.
Apart from scale advantages and increasing Dallas-based Energy
Transfer Partners' retail reach, the Susser Holdings buy will
help the partnership inch closer to creating a stand-alone
gasoline retailing unit, separate from its core pipeline and
terminals business. Over time, Energy Transfer Partners plans to
drop all its retail gas stations into Susser Petroleum Partners,
which will continue to be traded as an individual company on the
NYSE with Sunoco Chief Executive Bob Owens heading the combined
Under the terms of the agreement, Susser Holdings shareholders
will receive either $80.25 in cash, or 1.4506 units of Energy
Transfer Partners, or a combination of both, for each share they
hold. This cash offer values Susser Holdings shares at a 41%
premium to the pre-announcement closing price. Following the
announcement, stocks of Susser Holdings and Susser Partners
surged 36% and 22%, respectively, while units of Energy Transfer
fell about 1%.
Energy Transfer Partners currently retains a Zacks Rank #5
(Strong Sell). A better-ranked stock in the energy pipeline
sector would be
Boardwalk Pipeline Partners L.P.
). It carries a Zacks Rank #1 (Strong Buy).