U.S. pipeline company Plains All American Pipeline LP offered approximately USD740 million in stock to buy the 54% of PAA Natural Gas Storage LP that it does not already own. According to Plains, it sent a proposal to PAA's independent directors offering the company's unitholders 0.435 common units of Plains All American for each PAA unit. That valued the natural gas storage company's units at a 6% premium. It puts units at USD22.38 each, more than their USD21.09 value as of Tuesday's close.
In a statement, Plains Chief Executive Greg Armstrong said, "It is difficult to predict the timing and extent of a recovery in natural gas storage market conditions. Accordingly, it is clear that the next several years will be challenging for PNG on a stand-alone basis."
Plains owns the partnership's general partner, its incentive distribution rights, and all of its Series A and Series B subordinated units. This is in addition to holding 46% of PNG's common units.
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