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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
May 10, 2010
Date of Report (Date of earliest event reported)
ENERGY TRANSFER EQUITY, L.P.
(Exact name of Registrant as specified in its charter)
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Delaware
(State or other jurisdiction
of incorporation)
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1-32740
(Commission
File Number)
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30-0108820
(IRS Employer
Identification Number) |
3738 Oak Lawn Avenue
Dallas, Texas 75219
(Address of principal executive offices)
(214) 981-0700
(Registrants 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. Entry into a Material Definitive Agreement.
Acquisition of General Partner of Regency Energy Partners LP
As previously reported on May 11, on May 10, 2010, Energy Transfer Equity, L.P. (ETE) and
its wholly-owned subsidiary ETE GP Acquirer LLC (ETE Acquirer) entered into a General Partner
Purchase Agreement (the GP Purchase Agreement) with Regency GP Acquirer, L.P. (Regency
Acquirer) to acquire a 100% equity interest in the general partner entities of Regency Energy
Partners LP (Regency). In exchange, ETE will issue to Regency Acquirer 3,000,000 newly issued
Series A Convertible Preferred Units (the Preferred Units).
Regency Acquirer, an affiliate of GE Energy Financial Services, Inc. (GE EFS), owns,
directly or indirectly, all of the outstanding partnership interests in Regency GP LP (RGPLP),
which is the general partner of Regency, and all of the outstanding membership interests in Regency
GP LLC (RGPLLC), the general partner of RGPLP. Regency is a publicly-traded Delaware limited
partnership engaged in the gathering, processing, contract compression and transportation of
natural gas and natural gas liquids. RGPLP owns a 2.0% general partner interest and 100% of the
incentive distribution rights in Regency.
The Preferred Units will be issued in a private placement, relying on Section 4(2) of the
Securities Act of 1933, as amended, at a stated price of $100 per unit and will be entitled to a
preferential cash distribution of $2.00 per fiscal quarter. The Preferred Units will automatically
convert on the fourth anniversary of the date of issuance into an amount of ETE common units equal
in value to the issue price plus any accrued but unpaid distributions plus a specified premium
equal to the lesser of 10% of the issue price plus any accrued but unpaid distributions or a
premium derived from 25% of the accretion in the trading price of ETE common units subsequent to
the date of issuance of the Preferred Units. ETE may choose, at its sole option, to pay 50% of the
conversion consideration (based on the issue price plus any accrued
but unpaid distributions) in
cash. After the third anniversary of the date of issuance of the
Preferred Units, ETE may elect to redeem all, but not less than all,
of the Preferred Units for ETE common units or an amount in cash equal to the issue price
plus a premium paid out in common units, equal to the greater of 10% of the issue price plus any
accrued but unpaid distributions or a premium derived from 25% of the accretion in the trading
price of ETE common units subsequent to the date of issuance. GE EFS also has certain rights to
force ETE to redeem or convert the outstanding Preferred Units for specified consideration upon
the occurrence of certain extraordinary events involving ETE or Energy Transfer Partners, L.P.
(ETP). Holders of the Preferred Units have no voting rights, except that approval of a
majority of the Preferred Units is needed to approve any amendment to ETEs Third Amended and
Restated Agreement of Limited Partnership (the Partnership Agreement) that would result in (i)
any increase in the size of the class of Preferred Units, (ii) any alteration or change to the
rights, preferences, privileges, duties, or obligations of the Preferred Units or (iii) any other
matter that would adversely affect the rights or preferences of the Preferred Units, including in
relation to other classes of ETE partnership interests. The Preferred Units will be issued in
accordance with Amendment No. 3 (the Third Amendment) to the Partnership Agreement, which will be
adopted by LE GP, LLC, the general partner of ETE (the General Partner), in connection with the
closing of the transactions contemplated by the GP Purchase Agreement.
The GP Purchase Agreement contains customary representations, warranties and covenants between
the parties, which include Regency continuing to operate its business in the ordinary course in all
material respects until the closing of the transaction. Closing of the transactions contemplated by
the GP Purchase Agreement is also conditioned on receipt of amendments and/or waivers of certain
provisions of ETEs credit facility, the satisfaction or waiver of all closing conditions to the
closing of the transactions contemplated by the Redemption Agreement described under Redemption
and Exchange Agreement below and the Contribution Agreement described under Contribution
Agreement below, and certain other customary closing conditions.
At the closing of the transactions contemplated by the GP Purchase Agreement, ETE, ETP, and
Regency will adopt policies relating to conflicts of interest among ETP, ETE, Enterprise GP
Holdings L.P., and Regency (the Conflicts Policy). The Conflicts Policy will address (i)
standards for independence and separateness of the Boards of Directors of the general partners of
ETE, ETP and Regency, (ii) approval by
Conflicts Committees of the respective Boards of Directors
in the event of a material transaction between either ETP or ETE, on the one hand, and Regency, on
the other hand, (iii) procedures to prevent the sharing of commercially sensitive information
between either ETP or ETE, on the one hand, and Regency, on the other hand, and (iv) procedures for
the apportionment of business opportunities between ETP and Regency.
In addition, in connection with the GP Purchase Agreement, it is anticipated that ETE will
grant certain management rights to an affiliate of GE EFS with respect to Regency. In particular,
an affiliate of GE EFS will have the authority, so long as GE EFS and its affiliates continue to
maintain certain ownership thresholds in Regency common units, to appoint up to two directors to
the board of directors of RGPLLC, or alternatively, to appoint up to two board observers. It is
also anticipated that Kelcy Warren and Enterprise GP Holdings, L,P., as the collective owners of
approximately 81.2% of the membership interests of the General Partner, will grant Regency Acquirer
the right to appoint one director to the board of directors of the General Partner, or,
alternatively, to appoint one board observer, for so long as Regency Acquirer and its affiliates
maintain certain ownership thresholds of the Preferred Units.
A copy of the GP Purchase Agreement, including a form of the Third Amendment as Annex A, is
attached hereto as Exhibit 2.1, which is incorporated by reference into this Item 1.01. The
foregoing summaries of the GP Purchase Agreement and the Third Amendment does not purport to be
complete and are qualified in their entirety by reference to Exhibit 2.1 hereto.
Redemption and Exchange Agreement
Also on May 10, 2010, ETP and ETE entered into a Redemption and Exchange Agreement (the
Redemption Agreement) whereby ETP has agreed to transfer the membership interests in ETC
Midcontinent Express Pipeline III, L.L.C. (ETC III) to ETE. ETC III owns a 49.9% membership
interest in Midcontinent Express Pipeline, LLC (MEP), ETPs joint venture with Kinder Morgan
Energy Partners, L.P. that owns and operates the Midcontinent Express Pipeline. In exchange for
the membership interests in ETC III, ETP will receive and redeem 12,273,830 ETP common units
that are currently owned by ETE. The consideration payable under the Redemption Agreement is
subject to purchase price adjustment, payable in cash, based on changes in the working capital and
long-term debt levels of MEP from those as of January 1, 2010 and any capital expenditures made by
MEP after January 1, 2010.
The Redemption Agreement also provides ETE with an option to acquire (the Option) the
membership interests in ETC Midcontinent Express Pipeline II, L.L.C. (ETC II). ETC II owns a
0.1% membership in MEP. The Option may not be exercised until one year and one day following the
consummation of the transactions contemplated by the Redemption
Agreement.
The Redemption Agreement contains customary representations, warranties and
covenants between the parties, which include ETP managing ETC III in a manner such that MEP will
operate its business in the ordinary course in all material respects until the closing of the
transaction. Closing of the transactions contemplated by the Redemption Agreement is expected to
occur within 30 days and is also conditioned on the consummation of the transaction contemplated by
the GP Purchase Agreement, receipt of certain amendments and/or waivers of certain provisions of
ETEs, ETPs and Regencys respective credit facilities, as well as certain other customary closing
conditions. In addition to customary termination provisions, ETE may terminate the Redemption
Agreement if the GP Purchase Agreement has been terminated in accordance with its terms.
A copy of
the Redemption Agreement is attached hereto as Exhibit 2.2, which is incorporated by reference into
this Item 1.01. The foregoing summary of the Redemption Agreement does not purport to be complete
and is qualified in its entirety by reference to Exhibit 2.2 hereto.
Contribution Agreement
On May 10, 2010, ETE entered into a Contribution Agreement (the Contribution Agreement) with
Regency and Regency Midcontinent Express LLC. Pursuant to the Contribution Agreement, immediately
following the consummation of the transactions contemplated by the Redemption Agreement, ETE will
contribute the membership interests in ETC III and assign its rights under the Option to Regency
Midcontinent Express LLC in exchange for 26,266,791 newly issued Regency common units. The consideration
payable
under the Contribution Agreement is subject to a purchase price adjustment consistent with
the purchase price adjustment under the Redemption Agreement.
The Contribution Agreement contains customary representations, warranties and covenants
between the parties, which include Regency continuing to operate in the ordinary course in all
material respects until the closing of the transaction. Closing of the transactions contemplated
by the Contribution Agreement is expected to occur within 30 days and is conditioned on the receipt
of amendments and/or waivers of certain provisions of ETEs and ETPs respective credit facilities,
as well as certain other customary closing conditions. Any party may terminate the Contribution
Agreement if the Redemption Agreement has been terminated, and ETE may terminate the Contribution
Agreement if the GP Purchase Agreement has been terminated.
A copy of the Contribution Agreement
is attached hereto as Exhibit 2.3, which is incorporated by reference into this Item 1.01. The
foregoing summary of the Contribution Agreement does not purport to be complete and is qualified
in its entirety by reference to Exhibit 2.3 hereto.
Item 3.02. Unregistered Sales of Equity Securities.
The information included in Item 1.01 above under the heading General Partner Purchase
Agreement is incorporated by reference into this Item 3.02.
Item 7.01. Regulation FD Disclosure.
The information included in Item 1.01 above is incorporated by reference into this Item 7.01.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit |
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Description of the Exhibit |
Exhibit 2.1*
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General Partner Purchase Agreement, dated May 10, 2010, by
and among Regency GP Acquirer, L.P., Energy Transfer
Equity, L.P. and ETE GP Acquirer LLC. |
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Exhibit 2.2*
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Redemption and Exchange Agreement, dated May 10, 2010, by
and among Energy Transfer Partners, L.P. and Energy
Transfer Equity, L.P. |
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Exhibit 2.3*
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Contribution Agreement, dated May 10, 2010, by and among
Energy Transfer Equity, L.P., Regency Energy Partners LP
and Regency Midcontinent Express LLC. |
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Pursuant to the rules of the Commission, the remaining schedules and similar attachments to
the agreement have not been filed herewith. The registrant agrees to furnish supplementally a copy
of any omitted schedule to the Commission upon request. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: May 13, 2010 |
ENERGY TRANSFER EQUITY, L.P.
By: LE GP, LLC
its general partner
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/s/ John W. McReynolds
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John W. McReynolds |
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President and Chief Financial Officer |
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EXHIBIT INDEX
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Exhibit |
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Number |
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Description of the Exhibit |
Exhibit 2.1*
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General Partner Purchase Agreement, dated May 10, 2010, by
and among Regency GP Acquirer, L.P., Energy Transfer
Equity, L.P. and ETE GP Acquirer LLC. |
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Exhibit 2.2*
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Redemption and Exchange Agreement, dated May 10, 2010, by
and among Energy Transfer Partners, L.P. and Energy
Transfer Equity, L.P. |
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Exhibit 2.3*
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Contribution Agreement, dated May 10, 2010, by and among
Energy Transfer Equity, L.P., Regency Energy Partners LP
and Regency Midcontinent Express LLC. |
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Pursuant to the rules of the Commission, the remaining schedules and similar attachments to
the agreement have not been filed herewith. The registrant agrees to furnish supplementally a copy
of any omitted schedule to the Commission upon request. |