OCI NV, Amsterdam, today said that it has submitted a proposal to the board of directors of OCI Partners LP to acquire all publicly held common units of OCI Partners in exchange for OCI NV shares. OCI currently owns 79.88 percent of issued and outstanding common units of OCI Partners, which has an ammonia plant and methanol plant in Beaumont, Texas.
OCI is proposing an exchange ratio of 0.5200 OCI NV shares for each publicly-held unit of OCI Partners, as part of a transaction that is to be effected through a merger of OCI Partners with a wholly-owned subsidiary of OCI. In exchange, OCI will offer 9.10 million newly issued OCI NV shares, to be admitted to listing on Euronext Amsterdam, representing approximately 4 percent of total OCI shares currently outstanding. The proposed Exchange Ratio represents a value of $7.80 per unit to OCI Partners minority shareholders, or an 8.3 percent premium over the closing price of OCI Partners common units as of Dec. 5, 2016, and a 25.6 percent premium over the 30 trading day average OCI Partners/OCI exchange ratio as of Dec. 5.
The proposed transaction is subject to approval of a definitive agreement by the board of directors of OCI NV, the board of directors of the general partner of OCI Partners and a Conflicts Committee to be established by the OCIP board, and would be subject to customary closing conditions. OCI NV said there can be no assurance that a definitive agreement will be executed or that any transaction will materialize.
“We believe the proposed transaction is attractive to minority investors in OCI Partners who, as new OCI NV shareholders, would have the opportunity to diversify from single-asset equity ownership to a leading global methanol and fertilizer producer,” said Nassef Sawiris, OCI NV CEO. “OCI has significant growth prospects with the start-up of two new world-scale greenfield facilities in the United States: a fertilizer complex in Wever, Iowa, and a methanol plant in Beaumont, Texas, adjacent to the facility owned by OCI Partners. In addition, it allows unitholders to benefit from the significantly better trading liquidity of the OCI NV share compared to OCI Partners. For OCI NV shareholders, the proposed transaction allows for simplification of the group’s corporate structure, greater operational synergies, including the removal of public listing costs and addresses concerns over the attractiveness of Master Limited Partnerships (MLPs) as an asset class in an environment of rising interest rates and potential changes in U.S. tax regulations.”