{"id":60008,"date":"2023-09-12T09:39:25","date_gmt":"2023-09-12T13:39:25","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/magellan-appears-to-be-winning-shareholder-backing-for-oneok-deal\/"},"modified":"2023-09-12T09:39:28","modified_gmt":"2023-09-12T13:39:28","slug":"magellan-appears-to-be-winning-shareholder-backing-for-oneok-deal","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=60008","title":{"rendered":"Magellan Appears to Be Winning Shareholder Backing for Oneok Deal"},"content":{"rendered":"
\n
<\/p>\n

<\/p>\n

<\/p>\n<\/figure><\/div>\n

Oneok\u2019s contentious deal to buy
\n Magellan Midstream Partners
\n for around $19 billion looks like it will get completed after an aggressive campaign by Magellan management to win over its investor base and recent recommendations in favor of the deal from two influential proxy advisory firms.<\/p>\n

Magellan Midstream Partners (ticker: MMP) said last week that Glass Lewis and Institutional Shareholder Services (ISS) had recommended that Magellan\u2019s unitholders approve the deal which was announced in mid May.\u00a0<\/p>\n

\n

Since then, Magellan units have gotten a lift, although they were little changed at $66.45 Monday, near a recent 52-week high of $67.
\n Oneok
\n (OKE) was down 0.4% to $64.53 Monday.\u00a0<\/p>\n

The arbitrage spread between Magellan\u2019s unit price and the deal value has narrowed lately and stands at about $1.50 per Magellan unit.\u00a0<\/p>\n

This indicates that arbitrageurs are putting odds of 80% or more that the deal will get done, assuming that Magellan would trade down to about $60 if the deal fails to get sufficient unitholder support. Magellan holders are due to receive 0.667 shares of Oneok and $25 a share in cash for each Magellan unit.<\/p>\n

\u00a0When the deal was announced, the value of the consideration was $67.50, compared with Magellan\u2019s pre-deal price of about $55. The arbitrage spread had been as wide as $5 per unit in June when Wall Street was more skeptical about the deal\u2019s prospects.<\/p>\n

The unitholder vote is scheduled for Sept. 21 and the deal could close soon after that if the transaction is okayed by both sets of shareholders.<\/p>\n

Oneok shareholders are seen as likely to support the deal which would unite two of the larger energy pipeline operators in the country. Oneok mainly transports natural-gas liquids while Magellan is a leading carrier of gasoline, jet fuel, diesel and other\u00a0 crude-oil products mostly in the center of the country. The key issue from the start would be whether Magellan holders okay the transaction.<\/p>\n

After the deal was announced in May, many individual holders of Magellan were upset about the prospect of a large tax bill for long-term investors because the deal is taxable to Magellan holders. Most takeover deals involving stock as currency are tax free to holders\u2014at least for the equity portion of the transaction\u2014but it differs when the target is a partnership like Magellan. Oneok is structured as a corporation.<\/p>\n

Energy Income Partners, one of the largest Magellan holders with a 3% stake, came out against the deal soon after it was announced, citing a high tax bill for long-standing Magellan holders and arguing that Magellan would be better off as an independent entity.<\/p>\n

Much of the distributions (the partnership equivalent of dividends) from Magellan and other energy pipeline partnerships to their investors are tax deferred and those taxes would be payable with the Oneok deal, resulting in what could be taxes of $20 or more per unit for long-time Magellan holders.<\/p>\n

Energy Income Partners has redoubled its efforts to thwart the deal, posting a letter on its website in early September, decrying what it called Magellan\u2019s \u201cscare tactics\u2019 to gain shareholder approval and saying the company\u2019s own financials \u201cshow definitely that Magellan is better off as a stand-alone company.\u201d<\/p>\n

Those efforts don\u2019t appear to be gaining sufficient traction to kill the deal although the transaction faces some key hurdles. The hurdles are that Magellan needs the support of the majority of its unitholders, not just a majority of voting holders. And a sizable portion of its shareholder base is individual investors, many of whom face big tax bills. And individual investors tend to vote in smaller numbers than institutional investors in shareholder votes.<\/p>\n

ISS and Glass Lewis are influential with institutional investors and their recommendations in favor of the deal could be important. Glass Lewis, for instance, argued that the merger would yield a \u201ccombined energy infrastructure firm with greater scale, breadth and diversity.\u2019 ISS said the premium offered by Oneok \u201cstands out among recent precedent transactions in the sector.\u201d<\/p>\n

Aaron Milford, Magellan\u2019s CEO, told Barron\u2019s recently that \u201cwe are working hard to make sure that unit holders appreciate the benefits of the transaction.\u201d<\/p>\n

On its web site, Magellan lays out the case for the deal, arguing it would create a \u201cdiversified and complimentary\u201d company with better \u201cgrowth opportunities.\u201d<\/p>\n

It also cites risk with remaining independent including a reliance on refined products transportation given the ongoing energy transition away from fossil fuels. That transition could affect \u201cdemand more than expected.\u201d<\/p>\n

On the tax issue, Magellan got an endorsement from New York tax expert Robert Willens, who wrote that \u201cthis transaction does not create tax liabilities for MMP\u2019s unitholders. Those liabilities were always present. Instead, this transaction simply accelerates their payment.\u201d<\/p>\n

Energy Income Partners countered this argument by saying that Magellan \u201ccontests a truism that investors benefit from deferral of taxes because of the time value of money.\u201d It also argues that Magellan is unduly downplaying its prospects as a stand-alone company to win shareholder approval.<\/p>\n

Magellan, however, appears to be winning the campaign with its argument that most holders don\u2019t have a big tax issue and that all will benefit from the premium that otherwise couldn\u2019t be achieved.\u00a0<\/p>\n

It\u2019s pushing hard, with one retail investor telling Barron\u2019s in an email today that he is getting daily emails and phone calls from the company\u2019s representatives urging him to vote. All these efforts appear to be paying off.<\/p>\n

Write to Andrew Bary at andrew.bary@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Oneok\u2019s contentious deal to buy Magellan Midstream Partners for around $19 billion looks like it will get completed after an aggressive campaign by Magellan management to win over its investor base and recent recommendations in favor of the deal from two influential proxy advisory firms. Magellan Midstream Partners (ticker: MMP) said last week that Glass […]<\/p>\n","protected":false},"author":1,"featured_media":60009,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-60008","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nMagellan Appears to Be Winning Shareholder Backing for Oneok Deal | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Oneok\u2019s contentious deal to buy Magellan Midstream Partners for around $19 billion looks like it will get completed after an aggressive campaign by\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=60008\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Magellan Appears to Be Winning Shareholder Backing for Oneok Deal | iFintechWorld\" \/>\n<meta property=\"og:description\" content=\"Oneok\u2019s contentious deal to buy Magellan Midstream Partners for around $19 billion looks like it will get completed after an aggressive campaign by\" \/>\n<meta property=\"og:url\" content=\"https:\/\/ifintechworld.com\/?p=60008\" \/>\n<meta property=\"og:site_name\" content=\"iFintechWorld\" \/>\n<meta property=\"article:published_time\" content=\"2023-09-12T13:39:25+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-09-12T13:39:28+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/09\/1694525966_social.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"640\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"News Room\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"News Room\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/ifintechworld.com\/?p=60008#article\",\"isPartOf\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=60008\"},\"author\":{\"name\":\"News Room\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61\"},\"headline\":\"Magellan Appears to Be Winning Shareholder Backing for Oneok Deal\",\"datePublished\":\"2023-09-12T13:39:25+00:00\",\"dateModified\":\"2023-09-12T13:39:28+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=60008\"},\"wordCount\":918,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/ifintechworld.com\/#organization\"},\"keywords\":[\"Featured\"],\"articleSection\":[\"Markets\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/ifintechworld.com\/?p=60008#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/ifintechworld.com\/?p=60008\",\"url\":\"https:\/\/ifintechworld.com\/?p=60008\",\"name\":\"Magellan Appears to Be Winning Shareholder Backing for Oneok Deal | iFintechWorld\",\"isPartOf\":{\"@id\":\"https:\/\/ifintechworld.com\/#website\"},\"datePublished\":\"2023-09-12T13:39:25+00:00\",\"dateModified\":\"2023-09-12T13:39:28+00:00\",\"description\":\"Oneok\u2019s contentious deal to buy Magellan Midstream Partners for around $19 billion looks like it will get completed after an aggressive campaign by\",\"breadcrumb\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=60008#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/ifintechworld.com\/?p=60008\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/ifintechworld.com\/?p=60008#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/ifintechworld.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Magellan Appears to Be Winning Shareholder Backing for Oneok Deal\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/ifintechworld.com\/#website\",\"url\":\"https:\/\/ifintechworld.com\/\",\"name\":\"Repay Down\",\"description\":\"Latest Personal Finance News, Tips and Updates\",\"publisher\":{\"@id\":\"https:\/\/ifintechworld.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/ifintechworld.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/ifintechworld.com\/#organization\",\"name\":\"Repay Down\",\"url\":\"https:\/\/ifintechworld.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png\",\"contentUrl\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png\",\"width\":558,\"height\":90,\"caption\":\"Repay Down\"},\"image\":{\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61\",\"name\":\"News Room\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png\",\"contentUrl\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png\",\"caption\":\"News Room\"},\"sameAs\":[\"https:\/\/ifintechworld.com\"],\"url\":\"https:\/\/ifintechworld.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Magellan Appears to Be Winning Shareholder Backing for Oneok Deal | iFintechWorld","description":"Oneok\u2019s contentious deal to buy Magellan Midstream Partners for around $19 billion looks like it will get completed after an aggressive campaign by","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/ifintechworld.com\/?p=60008","og_locale":"en_US","og_type":"article","og_title":"Magellan Appears to Be Winning Shareholder Backing for Oneok Deal | iFintechWorld","og_description":"Oneok\u2019s contentious deal to buy Magellan Midstream Partners for around $19 billion looks like it will get completed after an aggressive campaign by","og_url":"https:\/\/ifintechworld.com\/?p=60008","og_site_name":"iFintechWorld","article_published_time":"2023-09-12T13:39:25+00:00","article_modified_time":"2023-09-12T13:39:28+00:00","og_image":[{"width":1280,"height":640,"url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/09\/1694525966_social.jpeg","type":"image\/jpeg"}],"author":"News Room","twitter_card":"summary_large_image","twitter_misc":{"Written by":"News Room","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/ifintechworld.com\/?p=60008#article","isPartOf":{"@id":"https:\/\/ifintechworld.com\/?p=60008"},"author":{"name":"News Room","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61"},"headline":"Magellan Appears to Be Winning Shareholder Backing for Oneok Deal","datePublished":"2023-09-12T13:39:25+00:00","dateModified":"2023-09-12T13:39:28+00:00","mainEntityOfPage":{"@id":"https:\/\/ifintechworld.com\/?p=60008"},"wordCount":918,"commentCount":0,"publisher":{"@id":"https:\/\/ifintechworld.com\/#organization"},"keywords":["Featured"],"articleSection":["Markets"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/ifintechworld.com\/?p=60008#respond"]}]},{"@type":"WebPage","@id":"https:\/\/ifintechworld.com\/?p=60008","url":"https:\/\/ifintechworld.com\/?p=60008","name":"Magellan Appears to Be Winning Shareholder Backing for Oneok Deal | iFintechWorld","isPartOf":{"@id":"https:\/\/ifintechworld.com\/#website"},"datePublished":"2023-09-12T13:39:25+00:00","dateModified":"2023-09-12T13:39:28+00:00","description":"Oneok\u2019s contentious deal to buy Magellan Midstream Partners for around $19 billion looks like it will get completed after an aggressive campaign by","breadcrumb":{"@id":"https:\/\/ifintechworld.com\/?p=60008#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/ifintechworld.com\/?p=60008"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/ifintechworld.com\/?p=60008#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/ifintechworld.com\/"},{"@type":"ListItem","position":2,"name":"Magellan Appears to Be Winning Shareholder Backing for Oneok Deal"}]},{"@type":"WebSite","@id":"https:\/\/ifintechworld.com\/#website","url":"https:\/\/ifintechworld.com\/","name":"Repay Down","description":"Latest Personal Finance News, Tips and Updates","publisher":{"@id":"https:\/\/ifintechworld.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/ifintechworld.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/ifintechworld.com\/#organization","name":"Repay Down","url":"https:\/\/ifintechworld.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/","url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png","contentUrl":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png","width":558,"height":90,"caption":"Repay Down"},"image":{"@id":"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61","name":"News Room","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/image\/","url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png","contentUrl":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png","caption":"News Room"},"sameAs":["https:\/\/ifintechworld.com"],"url":"https:\/\/ifintechworld.com\/?author=1"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/60008","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=60008"}],"version-history":[{"count":1,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/60008\/revisions"}],"predecessor-version":[{"id":60010,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/60008\/revisions\/60010"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/media\/60009"}],"wp:attachment":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=60008"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=60008"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=60008"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}