Cheniere Energy Inc. offered to buy the 20 percent of Cheniere Energy Partners LP Holdings LLC it doesn’t already own in a stock-for-stock exchange valued at $21.90 a share in a deal that simplifies its corporate structure.
Cheniere, the first company to export U.S. shale gas, is offering 0.5049 Cheniere shares for each outstanding share of Cheniere Energy Partners LP Holdings LLC, according to a statement Friday. That’s a premium of about 3 percent, based on Thursday’s closing prices, according to the statement. It values the target at about $5.1 billion.
Cheniere Chief Executive Officer Jack Fusco promised to streamline the company as it moves beyond developing export terminals into operating one that regularly sends out tankers full of shale gas. Fusco joined the Houston-based company in May, replacing co-founder Charif Souki, who was ousted in December after a dispute over strategy with billionaire investor Carl Icahn.
“There’s no need to have Cheniere Energy Partners LP Holdings LLC out there,” Andy DeVries, a New York-based analyst for CreditSights Inc., said by phone Friday.
The transaction is subject to the execution of a definitive agreement and approval by the boards of Cheniere, Cheniere Energy Partners LP Holdings LLC and a conflicts committee established by the board of Cheniere Energy Partners LP Holdings LLC. It’s expected to close by the 2017 first quarter, according to a presentation on the company’s website.
“The proposed transaction is attractive to investors in Cheniere Partners Holdings who, as new LNG shareholders, would have the opportunity to participate in the future success of the entire Cheniere complex,” Fusco said in the statement.
Cheniere Energy Partners LP Holdings LLC rose 3.5 percent to $22 at 10:24 a.m. in New York. Cheniere fell 1.9 percent to $42.53. Cheniere Energy Partners LP, also controlled by Cheniere, rose 2.1 percent to $28.81.
Cheniere Energy Partners LP Holdings LLC owns 56 percent of the unit that operates Sabine Pass, according to the company website.