May 8, 2013 (Shareholders Foundation) - An investigation on behalf of investors in Crestwood Midstream Partners LP (NYSE:CMLP) shares was announced concerning whether the offer to acquire Crestwood Midstream Partners LP for a value of approximately 27.2985 per NYSE:CMLP unit and the takeover process are unfair to investors in Crestwood Midstream Partners LP.
The investigation by a law firm concerns whether certain officers and directors of Crestwood Midstream Partners LP breached their fiduciary duties owed to NYSE:CMLP investors in connection with the proposed acquisition.
On May 6, 2013, Crestwood Midstream Partners LP (NYSE: CMLP) (Crestwood Midstream) and Crestwood Holdings LLC (Crestwood Holdings) (collectively,Crestwood) and Inergy, L.P. (NYSE:NRGY) (Inergy L.P.) and Inergy Midstream, L.P. (NYSE:NRGM) (Inergy Midstream) (collectively, Inergy) announced the signing of agreements to create a fully integrated midstream partnership with a total enterprise value of approximately $7 billion.
The terms of the agreements are as follows:
Crestwood Holdings will acquire the general partner of Inergy L.P. and will contribute the general partner and incentive distribution rights of Crestwood Midstream to Inergy L.P. in exchange for Inergy L.P. common units. Separately, Crestwood Midstream will be merged with a subsidiary of Inergy Midstream.
In the merger, Crestwood Midstream unitholders will receive 1.070 common units of Inergy Midstream for each unit of Crestwood Midstream they own, representing a 5% premium to the 20-day volume weighted average price (VWAP) of Crestwood Midstreams common units.
Additionally, all Crestwood Midstream public unitholders other than Crestwood Holdings will receive a one-time cash payment at closing of the merger of approximately $35 million in the aggregate, or $1.03 per unit, $25 million of which will be payable by Inergy Midstream and approximately $10 million of which will be payable by Crestwood Holdings. Inergy Midstream and Inergy L.P. will continue to be listed on the NYSE under the ticker symbols NRGM and NRGY, respectively.
Based on a closing price of $24.55 of Inergy Midstream, L.P. (NYSE:NRGM) units on May 3, 2013 plus the additional cash payment of $1.03 per unit, NYSE: CMLP investors will receive approximately $27.2985 per unit.
However, given that NYSE:CMLP units traded as high as $29.03 in July 2012 and that at least on analyst has set the high target price for NYSE:CMLP units at $32.50 per share, the investigation a law firm concerns whether the offer is too low for NYSE:CMLP unitholders. More specifically, the investigation focuses on whether the Crestwood Midstream Partners LP Board of Directors undertook an adequate sales process, adequately shopped the company before entering into the transaction, maximized shareholder value by negotiating the best price, and acted in the shareholders' best interests in connection with the proposed sale.
Crestwood Midstream Partners LP reported that its annual Total Revenue rose from $95.88 million in 2009 to $213.96 million in 2012.
Units of Crestwood Midstream Partners LP (NYSE:CMLP) closed on May 8, 2013, at $24.70 per share.