In most sectors of the stock market, mergers and acquisitions are almost always viewed as investor friendly: An opportunity to realize a windfall gain, or at least to hook onto a stronger company that will generate better long-term returns.
In the master limited partnership world, however, M&A has recently taken on a darker connotation. Mainly, with MLP share prices currently depressed, general partners are buying up the limited partner units they don’t currently control.
Many of the deals have been in cash, but at prices well below MLPs’ high points and in some cases even the IPO price. In January, for example, Equitrans Midstream Corp (NYSE: ETRN) swallowed up the former EQGP Holdings LP at a price of $20 a share. That was a good 25 percent above the pre-deal price range, but well below the IPO price of $27, and more than 40 percent under the June 2015 high point.
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Elliott and Roger on Sep. 30, 2020
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