The initial public offering ("IPO") of
Plains All American Pipeline, L.P.
) unit Plains GP Holdings LP hit a new mark, raising a total of
$2.82 billion. The IPO by Plains GP Holdings is the largest this
year in the U.S., outpacing
) animal health unit
) offering of $2.24 billion.
OCCIDENTAL PET (OXY): Free Stock Analysis
PLAINS ALL AMER (PAA): Free Stock Analysis
PFIZER INC (PFE): Free Stock Analysis Report
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Plains GP Holdings announced that it has priced its IPO of 128
million Class A shares at $22.00 per share. In Jul 2013, the
partnership had filed the IPO application with the U.S.
Securities and Exchange Commission. Initially, the partnership
intended to issue 128 million Class A shares in the price band of
$22.00 - $25.00 per share. The unit's Class A common stock will
start trading on the New York Stock Exchange from Oct 16, 2013
under the symbol "PAGP". Plains GP Holdings will act as a
corporation for the U.S. federal income tax related issues.
Per the filing, the partnership will allow the underwriters of
the issue a window of 30 days to purchase up to an additional
19.2 million shares of the Class A common stock of the IPO to
cover over-allotments, if any.
Later, the shareholders of Plains GP Holdings will hold the right
to obtain a part of the earnings from Plains All American
Pipeline in terms of quarterly cash distribution. Initially, the
shareholders are expected to receive 14.9 cents per share as
Plains GP Holdings intends to utilize the net proceeds from this
offering to make distributions to the existing shareholders, and
acquire a stake in the partnership owned by
Occidental Petroleum Corporation
) and Energy & Minerals Group. Currently, Plains All American
Pipeline's long-term debt-to-capitalization ratio is 45.9%. Post
offering, the partnership's long-term debt-to-capitalization
ratio will decline.
The newly formed entity will hold limited partner interests in
Plains AAP, L.P., which owns a 2% general partner stake in Plains
All American Pipeline.
The current transaction will help both the entities to allocate
their assets and restructure existing resources as per their
priorities. We believe this deal will subsequently enable both
the partnerships to concentrate on their strategic preferences
while identifying capacity for future growth.
Houston, Texas-based Plains All American Pipeline is engaged in
transportation, storage, terminalling and marketing of crude oil,
refined products and liquefied petroleum gas and other natural
gas related petroleum products in North America. The partnership
currently has a Zacks Rank #3 (Hold).