ONEOK Acquires Remaining Common Units: Agreement Announced
ONEOK, Inc. (NYSE:OKE) and EnLink Midstream, LLC (NYSE:ENLC) have announced that ONEOK will be acquiring all outstanding publicly held common units of EnLink in a tax-free transaction valued at $4.3 billion in ONEOK common stock.
Under this agreement, each EnLink common unit that ONEOK does not already own will be converted into 0.1412 shares of ONEOK common stock. This ratio was determined based on dividing $15.75 per unit (EnLink’s market close price on Nov. 22, 2024) by ONEOK’s 10-day volume-weighted average price (VWAP).
In total, ONEOK will issue around 37.0 million shares as part of this transaction, which represents roughly 6.0% of the total ONEOK shares outstanding upon completion of the deal.
The EnLink Board’s Conflicts Committee, comprising three independent directors, reviewed and unanimously approved the transaction, deeming it in the best interest of EnLink and its public unitholders. This recommendation was then unanimously approved by the EnLink Board as well.
Assuming all customary closing conditions are met, the transaction is expected to be finalized in the first quarter of 2025. The merger’s completion is contingent upon the approval of a majority of EnLink’s outstanding common units, including those owned by ONEOK. 44% of EnLink’s common units are held by ONEOK, with a commitment to vote in favor of the transaction.
ONEOK President and CEO Pierce H. Norton II expressed optimism about the transaction, emphasizing that it would benefit both ONEOK shareholders and EnLink unitholders by providing greater trading liquidity and an appealing dividend yield.
In related news, ONEOK recently concluded the acquisition of Global Infrastructure Partners’ (GIP) interest in EnLink for approximately $3.3 billion in cash.
Goldman Sachs & Co. LLC serves as the lead financial advisor to ONEOK in this transaction, with Barclays and Citi also advising. Legal advisory services for ONEOK are provided by Kirkland & Ellis LLP.
EnLink’s Conflicts Committee is advised by Evercore as a financial advisor and Richards, Layton & Finger, P.A. as a legal advisor. EnLink itself is receiving legal advice from Baker Botts L.L.P.
It’s important to note that this communication contains forward-looking statements, meaning predictions about future activities, events, or developments that may differ from actual results. Potential risks and uncertainties in this acquisition include successful integration, realization of cost savings, and even delays or failure to close the transaction. Investors should consider all factors before making any decisions.
