OCI NV, Amsterdam, said June 4 that its affiliate, OCIP Holding II LLC, has commenced a tender offer to purchase all publicly held common units of OCI Partners LP (OCIP), Nederland, Texas, not currently owned by OCI NV for $11.00 per common unit in cash. OCIP owns an ammonia and methanol complex in Beaumont, Texas. The offer represents a 10.0 percent premium over OCIP’s closing price June 1, 2018, a 16.4 percent premium over OCIP’s 90 trading day volume-weighted average unit price, and a 5.3 percent premium over OCIP’s two-year high unit price.
OCI currently owns approximately 88.25 percent of the issued and outstanding OCIP common units. The tender offer will expire July 2, 2018, unless the offer is extended in accordance with its terms.
OCI believes that this transaction is attractive for minority investors of OCIP to address concerns over the low trading liquidity of the units and the attractiveness of Master Limited Partnerships (MLPs) as an asset class, particularly in light of the latest change in federal income tax law. It said for OCI NV shareholders, the proposed transaction allows for simplification of the group’s corporate structure, including the elimination of public listing costs.
After the completion of the tender offer, OCI currently intends to purchase all of the outstanding common units not tendered pursuant to the tender offer (other than any common units already owned by OCI or its affiliates) pursuant to Section 15.1(a) of the First Amended and Restated Agreement of Limited Partnership of OCIP, as amended at a price per common unit equal to the Offer Price, net to the holder in cash, without interest thereon and less any applicable tax withholding. However, OCI said it may change its intent and there can be no assurance that OCI will consummate the buyout.
OCI has sought to buy out all of the OCIP shares in the past, but eventually pulled the proposal.