Pipeline operator Energy Transfer Partners LP said it will buy Sunoco Inc for $5.3 billion in stock and cash to get into the more lucrative crude oil transportation business as natural gas prices stay weak.M&A activities provide a nice check on the real value of some of these energy companies. Last week a similar announcement affecting a Bakken operator indicated a 25% premium (+/-, I forget the company, and I forget the exact premium). I just remember the premium.
Oil and gas production from shale formations in the United States has surged over the past two years, creating a scramble to build infrastructure to get supplies to refining hubs.
Sunoco shareholders will receive $25 in cash and 0.5245 Energy Transfer units, or $50.13, for every share they own.
The offer represents a 22.5 percent premium over Friday's close.