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DALLAS and CORPUS CHRISTI, Texas -- Calling the pending acquisition of Susser Holdings Corp. "a very bittersweet moment for the Susser family," CEO and Chairman Sam L. Susser said today that Sunoco Inc. parent Energy Transfer Partners LP (ETP) presented an offer the retailer couldn't refuse.
"[The Susser family] would have been happy to go on with things as they are, but Energy Transfer Partners presented a compelling proposal for our shareholders at [Susser Holdings], our unit holders at [Susser Petroleum Partners], as well as for our leadership team," he stated. "Pairing Stripes and Laredo Taco Company with Sunoco, one of the great fuel brands in the United States, [and] with the capability and resources of Sunoco and the ETP family, tees up our company for a tremendous future."
The chief executive made these comments during the company's first-quarter 2014 earnings call (click here for related story). Sam Susser also spoke of the potential of the newly combined entity.
Susser Holdings, parent of Stripes convenience stores, has been dedicated to developing a team that is truly a leader amongst its peers, strives to respect each and every individual team member, runs every story on a one-at-a-time basis, and is built on a robust, scalable, low-cost technology platform, he said.
"Combined with Sunoco's brand, logistics, credit card and geographic reach, this company has the potential to be a truly major player -- a juggernaut -- in the years ahead," Sam Susser added.
ETP Eager for Acquisition
At the same time Susser Holdings was discussing its first-quarter earnings this morning, Energy Transfer Partners was doing the same (click here for related story). The Dallas-based company said it is eager to acquire Susser Holdings, but can't guarantee its investors that ETP will move toward a simplification of its business structure.
"As we find ourselves today, the reality of MLP [master limited partnership] math … suggests that you actually do not reduce complexity in some instances," ETP CEO Kelcy Warren remarked during the company's earnings call. "I can't make a commitment that there will not be multiple MLPs underneath the family of MLPs of ETE [Energy Transfer Equity]. ... That's actually better for ETE."
Energy Transfer Equity is a master limited partnership that owns the general partner interest and 100 percent of the incentive distribution rights of Energy Transfer Partners, which is the parent of Sunoco Inc. and Sunoco Logistics Partners LP, another master limited partnership.
"The compatibility of the MLPs and the sharing of opportunity that can grow the family has been a wonderful business plan," Warren continued. "I'd like to tell you that we're committed to simplifying our organization. I know the regulatory agencies would like to see that. We will try, but not to the detriment of our unit holders or the family."
In prepared remarks, the company reported that the Susser Holdings acquisition, valued at $1.8 billion, will provide "a sound and deliberate exit path that generates significant cash proceeds for overall new leveraging and growth at ETP."
As CSNews Online previously reported, the transaction is expected to close in the third quarter of this year. By acquiring Susser Holdings, ETP will own the general partner interest and the incentive distribution rights in Susser Petroleum Partners LP, approximately 11 million Susser Petroleum common units -- representing approximately 50.2 percent of outstanding units -- and Susser's retail operations consisting of 630 Stripes convenience stores.
Once completed, ETP will "drop down" all of its retail assets to Susser Petroleum, which will continue to operate as a publicly traded master limited partnership.
Jamie Welch, ETE's group chief financial officer and head of business energy transfer equity, also commented on the Susser Holdings acquisition during the earnings call. "The addition of Susser to the Sunoco network broadens Sunoco's geographic footprint and creates a portfolio of strong brands that should generate sustained earnings growth over time," said Welch. "ETE is very excited at the prospect of being the ultimate long-term [general partner/incentive distribution rights] runner of that business."
Noting there are numerous opportunities for strong performance and growth, Welch added, "We're also very pleased that the Susser family and their employees will be joining our family."