8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): June 14, 2018

 

 

Tallgrass Energy Partners, LP

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-35917   46-1972941

(State or Other Jurisdiction of

Incorporation or Organization)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

4200 W. 115th Street, Suite 350

Leawood, Kansas

  66211
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: (913) 928-6060

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Exchange Act (17 CFR 240.12b-2).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 8.01. Other Events.

Legal Proceedings Regarding the Merger with Tallgrass Energy GP, LP

As previously disclosed, on March 26, 2018, Tallgrass Energy GP, LP, a Delaware limited partnership (“TEGP”), Tallgrass Equity, LLC, a Delaware limited liability company (“Tallgrass Equity”), Tallgrass Energy Partners, LP, a Delaware limited partnership (“TEP”), Razor Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of TEP (“Merger Sub”), and Tallgrass MLP GP, LLC, a Delaware limited liability company (“TEP GP”), entered into a definitive Agreement and Plan of Merger (“Merger Agreement”). Subject to the satisfaction or waiver of certain conditions in the Merger Agreement, Merger Sub will merge with and into TEP, with TEP surviving the merger as a wholly owned subsidiary of Tallgrass Equity and its subsidiaries (the “Merger”). At the effective time of the Merger, each issued and outstanding common unit representing a limited partner interest in TEP (collectively, the “TEP Common Units”), except for any TEP Common Units held by Tallgrass Equity, Tallgrass Equity Investments, LLC, a wholly owned subsidiary of Tallgrass Equity, or TEP, will be converted into the right to receive 2.0 Class A shares representing limited partner interests in TEGP (collectively, the “TEGP Class A Shares”).

On May 18, 2018, TEP filed a definitive proxy statement (the “Proxy Statement”) with the Securities and Exchange Commission (“SEC”) for the solicitation of proxies in connection with the special meeting of TEP’s unitholders to be held on June 26, 2018 to consider and vote on a proposal to approve the Merger Agreement and the Merger.

As previously described in the Proxy Statement, in April 2018, two public common unitholders of TEP filed separate lawsuits under the federal securities laws in the United States District Court for the District of Delaware challenging the sufficiency of the disclosures made in the registration statement on Form S-4 filed by TEGP, of which the Proxy Statement forms a part, in connection with the Merger. These cases are captioned Leadford v. Tallgrass Energy Partners, LP, et al., Case No. 1:18-cv-00545-RGA (D. Del.) (the “Leadford Action”) and Dake v. Tallgrass Energy Partners, LP, et al., Case No. 1:18-cv-00580-RGA (D. Del.) (the “Dake Action”). The Leadford Action is asserted on behalf of a putative class of holders of TEP Common Units other than those held by Tallgrass Equity, Tallgrass Equity Investments, LLC or TEP, while the Dake Action is brought only on behalf of the named plaintiff.

Both actions allege violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 14a-9 promulgated thereunder based on various alleged omissions of material information from the registration statement on Form S-4 filed by TEGP, of which the Proxy Statement forms a part. The Leadford Action names as defendants TEP and each of TEP GP’s directors, individually. It seeks to compel TEP to issue revised disclosures, to enjoin the Merger, damages, and an award of costs and attorneys’ and experts’ fees. On April 24, 2018, the plaintiff in the Leadford Action filed a motion for preliminary injunction seeking to enjoin the TEP unitholder vote to approve the Merger. The Dake Action names as defendants TEP and each of TEP GP’s directors, individually. It seeks to enjoin the Merger (or, in the alternative, rescission or an award of rescissory damages in the event the Merger is completed), to compel TEP to issue revised disclosures, a declaration that the defendants violated Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9 promulgated thereunder, and an award of costs and attorneys’ and experts’ fees. On May 21, 2018, the plaintiff in the Dake Action filed a motion for a preliminary injunction seeking to enjoin the TEP unitholder vote to approve the Merger.


In order to moot what TEP considers to be unmeritorious disclosure claims, alleviate the costs, risks and uncertainties inherent in litigation and provide additional information to its unitholders, TEP has determined to voluntarily supplement the Proxy Statement as described in this Current Report on Form 8-K. Nothing in this Current Report on Form 8-K shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the disclosures set forth herein. To the contrary, TEP specifically denies all allegations in the foregoing complaints, including without limitation that any additional disclosure was or is required. As a result of the supplemental disclosures set forth herein, plaintiffs in the Leadford Action and the Dake Action have agreed to withdraw their motions for a preliminary injunction.

SUPPLEMENT TO THE DEFINITIVE PROXY STATEMENT

TEP is providing additional information regarding the Proxy Statement to its unitholders. These disclosures should be read in connection with the Proxy Statement, which should be read in its entirety. To the extent that the information set forth herein differs from or updates information contained in the Proxy Statement, the information set forth herein shall supersede or supplement the information in the Proxy Statement. Defined terms used but not defined herein have the meanings set forth in the Proxy Statement. Without admitting in any way that the disclosures below are material or otherwise required by law, TEP makes the following amended and supplemental disclosures (with additional language in bold and underlined text below):

The disclosure in the list of peers under the heading “Peer Group Trading Analysis” on page 53 is hereby amended and supplemented by adding the trading multiples utilized by Evercore for each of the companies listed in the peer group across from the peer group company names:

 

     Enterprise Value / EBITDA  

Partnership / Corporation

   2018E      2019E      2020E  

Refined Products / Crude Oil MLPs

        

Blueknight Energy Partners, L.P.

     10.6      9.4      8.4
  

 

 

    

 

 

    

 

 

 

Buckeye Partners, L.P.

     9.3        8.9        8.3  
  

 

 

    

 

 

    

 

 

 

Genesis Energy, L.P.

     9.8        9.2        8.8  
  

 

 

    

 

 

    

 

 

 

Global Partners LP

     8.0        7.8        7.9  
  

 

 

    

 

 

    

 

 

 

Holly Energy Partners, L.P.

     12.7        12.1        11.6  
  

 

 

    

 

 

    

 

 

 

Magellan Midstream Partners, L.P.

     12.8        12.0        11.3  
  

 

 

    

 

 

    

 

 

 

MPLX LP

     11.5        10.6        10.0  
  

 

 

    

 

 

    

 

 

 

Phillips 66 Partners LP

     9.4        7.9        6.4  
  

 

 

    

 

 

    

 

 

 

Plains All American Pipeline, L.P.

     12.1        10.7        10.0  
  

 

 

    

 

 

    

 

 

 


Shell Midstream Partners, L.P.

     11.0        7.6        5.6  
  

 

 

    

 

 

    

 

 

 

Valero Energy Partners LP

     8.9        7.2        6.1  
  

 

 

    

 

 

    

 

 

 

FERC-Regulated Natural Gas Pipeline MLPs

        

Boardwalk Pipeline Partners, LP

     7.7      7.7      8.7
  

 

 

    

 

 

    

 

 

 

Dominion Midstream Partners, LP

     20.3        11.9        8.9  
  

 

 

    

 

 

    

 

 

 

Energy Transfer Partners, L.P.

     7.1        6.5        6.3  
  

 

 

    

 

 

    

 

 

 

EQT Midstream Partners, LP

     6.8        5.1        4.7  
  

 

 

    

 

 

    

 

 

 

TC PipeLines, LP

     10.1        9.5        8.0  
  

 

 

    

 

 

    

 

 

 

FERC-Regulated Natural Gas Pipeline C-Corps

        

TransCanada Corporation

     13.8      12.0      11.6
  

 

 

    

 

 

    

 

 

 

Enbridge Inc.

     11.7        11.1        10.0  
  

 

 

    

 

 

    

 

 

 

Kinder Morgan, Inc.

     9.8        9.5        9.0  
  

 

 

    

 

 

    

 

 

 

The disclosure in the table on pages 54-55 is hereby amended and supplemented as follows:

Precedent M&A Transactions. FERC-regulated natural gas pipelines

 

Date

Announced

  

Acquirer

  

Target

  

Seller

   EBITDA
Multiple
 
02/2018    Tallgrass Equity, LLC    25.01% interest in Rockies Express Pipeline LLC    Tallgrass Development, LP      6.4
06/2017    TC Pipeline    49.3% interest in Iroquois Gas Transmission System, LP and 11.8% interest in Portland Natural Gas Transmission System    TransCanada Corporation      10.9  
04/2017    Tallgrass Energy Partners, LP    25% interest in Rockies Express Pipeline LLC    Tallgrass Development, LP      6.6  
10/2016    Dominion Midstream Partners    Questar Pipeline LLC    Dominion Resources      10.0  
07/2016    Southern Company    50% Interest in Southern Natural Gas Pipeline System    Kinder Morgan, Inc.      10.4  
05/2016    Tallgrass Energy Partners, LP    25% interest in Rockies Express Pipeline LLC    Sempra U.S. Gas and Power      11.0  
11/2015    Kinder Morgan, Inc. and Brookfield Infrastructure Partners L.P.    Natural Gas Pipeline Company of America LLC    Myria Holdings, Inc.      13.1  
10/2014    TC Pipelines, LP    49.9% interest in Portland Natural Gas Transmission System    TransCanada Corporation      10.1  


Date

Announced

  

Acquirer

  

Target

  

Seller

  

EBITDA
Multiple

08/2015    Dominion Midstream Partners, LP    26% interest in Iroquois Gas Transmission System, L.P.    Affiliates of National Grid plc and New Jersey Resources Corporation    9.8
05/2015    GE Energy Financial Services and Caisse de dépôt et placement du Québec    Southern Star Central Corp    Morgan Stanley Infrastructure    11.6
04/2015    Dominion Midstream Partners, LP    Dominion Carolina Gas Transmission, LLC    Dominion Resources, Inc.    13.0
02/2015    TC Pipelines, LP    30% interest in Gas Transmission Northwest LLC    TransCanada Corporation    10.4
12/2014    Dominion Resources, Inc.    Carolina Gas Transmission    SCANA Corporation    13.0
10/2014    TC Pipelines, LP    30% interest in Bison Pipeline LLC    TransCanada Corporation    10.2
04/2014    El Paso Pipeline Partners, L.P.    50% interest in Ruby Pipeline, 50% interest in Gulf LNG and 47.5% interest in Young Gas Storage    Kinder Morgan, Inc.    9.0
07/2013    EQT Midstream Partners, LP    Sunrise Pipeline, LLC    EQT Corporation    9.9
05/2013    TC PipeLines, LP    45% interest in Gas Transmission Northwest LLC and Bison Pipeline LLC    TransCanada Corporation    11.0
08/2012    Morgan Stanley Infrastructure Partners    Remaining 60% interest in Southern Star Central Corp    General Electric    9.0
08/2012    Tallgrass Energy Partners, LP    Kinder Morgan Interstate Gas Transmission, Trailblazer Pipeline Company, Casper-Douglas, West Frenchie Draw & 50% interest in REX    Kinder Morgan, Inc.    8.3
08/2012    Kinder Morgan Energy Partners, L.P.    Tennessee Gas Pipeline & 50% interest in El Paso Natural Gas    Kinder Morgan, Inc.    8.0


The disclosure in the table on pages 56-57 is hereby amended and supplemented as follows:

Precedent M&A Transactions. Crude Oil Pipeline Transactions (Excluding Offshore Systems)

 

Date

Announced

  

Acquirer

  

Target

  

Seller

   EBITDA
Multiple
 

01/2018

   Andeavor    100% interest in Rangeland Energy II, LLC    Rangeland Energy, LLC      9.0

12/2017

   Noble Midstream Partners LP and Greenfield Midstream, LLC    Greenfield Midstream, LLC and Saddle Butte Pipeline, LLC    EnCap Flatrock and Saddle Butte Rockies Midstream LLC      26.0  

11/2017

   BlackRock Inc. and Navigator Energy Services, LLC    50% interest in Glass Mountain Pipeline, LLC    SemGroup Corporation      15.0  

10/2017

   Global Infrastructure Partners    100% interest in Medallion Gathering & Processing, LLC    Laredo Midstream Services, LLC and Medallion Midstream Holdings, LLC      24.0  

09/2017

   Phillips 66 Partners LP    25% interest in Dakota Access, LLC and 25% interest in Energy Transfer Crude Oil Company, LLC    Phillips 66 Company      9.0  

09/2017

   MPLX LP    Explorer Pipeline Co., Lincoln Pipeline LLC, MLP Louisiana Holdings LLC and LOCAP LLC    Marathon Petroleum Corporation      7.6  

08/2017

   Holly Energy Partners, L.P.    50% interest in Frontier Aspen LLC and 75% interest in SLC Pipeline LLC    Plains All American Pipeline, L.P.      10.9  

08/2017

   Tallgrass Energy Partners LP    Crude oil gathering assets    Outrigger Energy LLC      NA  

06/2017

   Noble Midstream Partners LP        Colorado River DevCo LP and Blanco River DevCo LP    Noble Energy, Inc.      8.7  

02/2017

   MPLX, LP    Ozark Pipeline    Enbridge Pipelines, LLC      NA  

02/2017

   Plains All American Pipeline, LP and Noble Midstream Partners, LP    Advantage Pipeline, LLC         NA  


Date

Announced

  

Acquirer

  

Target

  

Seller

  

EBITDA
Multiple

08/2016    MarEn Bakken Company LLC (JV between Enbridge Energy Partners, L.P. and Marathon Petroleum Corporation)    36.75% Interest in Bakken Pipeline       NA
01/2016    Tesoro Corporation    Great Northern Midstream LLC       5.5
11/2015    Tesoro Logistics LP    Crude oil and refininged products storage and pipeline assets in Los Angeles    Tesoro Corporation    8.3
05/2015    Summit Midstream Partners, LP    Crude oil and produced water gathering systems and transmission pipelines    Summit Midstream Partners, LLC    13.0
03/2015    EnLink Midstream Partners, LP    Victoria Express Pipeline    Devon Energy Corporation    10.0
03/2015    Tallgrass Energy Partners, LP    33.3% interest in Tallgrass Pony Express Pipeline    Tallgrass Development, LP    10.3
01/2015    Kinder Morgan, Inc.    Hiland Partners       16.0
01/2015    EnLink Midstream Partners, LP and EnLink Midstream, LLC    LPC Crude Oil Marketing LLC       8.0
12/2014    MPLX LP    30.5% interest in MPLX Pipe Line Holdings LP    Marathon Petroleum Corporation    10.0
11/2014    Plains All American Pipeline, L.P.    50% interest in BridgeTex Pipeline Company LLC    Occidental Petroleum Corporation    10.5
09/2014    Tallgrass Energy Partners, LP    33.3% interest in Tallgrass Pony Express Pipeline    Tallgrass Development, LP    9.0
06/2014    Rose Rock Midstream, L.P.    17.0% interest in White Cliffs Pipeline    SemGroup Corporation    15.0
06/2014    Valero Energy Partners LP    McKee Crude System, Three Rivers Crude System and Wynnewood Products System        Valero Energy Corporation    10.0
02/2014    MPLX LP    13% interest in MPLX Pipe Line Holdings LP    Subsidiary of Marathon Petroleum Corporation    10.0
12/2013    Rose Rock Midstream, L.P.    17.0% interest in White Cliffs Pipeline    SemGroup Corporation    14.0


Date

Announced

  

Acquirer

  

Target

  

Seller

  

EBITDA
Multiple

11/2013    Tesoro Logistics LP    Remaining portion of logistics assets related to Tesoro’s acquisition of BP’s Carson City assets    Tesoro Corporation    10.4
10/2013    JP Energy Development    Wildcat Permian Services LLC    Wildcat Midstream Mesquite, LLC and Approach Midstream Holdings, LLC    41.2
05/2013    Spectra Energy Partners    50% interest in 1,717-mile Express-Platte Pipeline System    Spectra Energy Corp    11.4
04/2013    MPLX LP    Additional 5% stake in MPLX Pipe Line Holdings for 56% total ownership    Marathon Petroleum Corporation    9.5
01/2013    Rose Rock Midstream, L.P.    17.0% interest in White Cliffs Pipeline    SemGroup Corporation    14.9
12/2012    Spectra Energy Corp    100.0% interest in Express-Platte Pipeline System    Borealis Infrastructure, Ontario Teachers’ and Kinder Morgan    11.5

The disclosure in the second full paragraph on page 62 of the Proxy Statement is hereby supplemented by amending and restating the paragraph to read as follows:

Since January 2015, Evercore provided financial advisory services to (i) the TEP Conflicts Committee with respect to six separate dropdown transactions between TEP and Tallgrass Development and (ii) the TEGP Conflicts Committee with respect to one merger transaction between TE and Tallgrass Development, for which Evercore received a aggregate fees of $1.65 million and in addition to reimbursement of expenses.

Cautionary Note Concerning Forward-Looking Statements

Disclosures in this Current Report on Form 8-K contain forward-looking statements. All statements, other than statements of historical facts, included that address activities, events or developments that management expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of TEP and TEGP, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements, and other important factors that could cause actual results to differ materially from those projected, including those set forth in reports filed by TEP and TEGP with the SEC. Any forward-looking statement applies only as of the date on which such statement is made and TEP and TEGP do not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.


Additional Information and Where to Find it

This communication may be deemed to be solicitation material in respect of the proposed transactions referred to in this Current Report on Form 8-K. In connection with the transactions referred to in this Current Report on Form 8-K, TEGP filed a registration statement on Form S-4 with the SEC that includes a preliminary proxy statement for the TEP unitholders. The registration statement was declared effective by the SEC on May 9, 2018, and TEP commenced mailing the definitive proxy statement/prospectus to its unitholders on or about May 23, 2018.

INVESTORS AND SECURITY HOLDERS OF TEGP AND TEP ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS, AS SUPPLEMENTED BY THIS CURRENT REPORT ON FORM 8-K, AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION.

Investors and security holders are able to obtain free copies of the proxy statement/prospectus and will be able to obtain free copies of other documents filed with the SEC by TEGP or TEP through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by TEGP and TEP will be available free of charge on TEGP’s and TEP’s website at www.tallgrassenergylp.com, in the “Investor Relations” tab near the top of the page, or by contacting TEGP’s and TEP’s Investor Relations Department at 913-928-6012.

Participants in the Solicitation

TEGP and TEP and their respective general partner’s directors and executive officers may be considered participants in the solicitation of proxies with respect to the proposed transactions under the rules of the SEC. Information about the directors and executive officers of TEGP’s general partner may be found in TEGP’s 2017 Form 10-K filed with the SEC on February 13, 2018, and any subsequent statements of changes in beneficial ownership filed with the SEC. Information about the directors and executive officers of TEP’s general partner may be found in TEP’s 2017 Form 10-K filed with the SEC on February 13, 2018, and any subsequent statements of changes in beneficial ownership filed with the SEC. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will also be included in any proxy statement and other relevant materials to be filed with the SEC when they become available.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

TALLGRASS ENERGY PARTNERS, LP
By:  

Tallgrass MLP GP, LLC,

its general partner

By:  

/s/ David G. Dehaemers, Jr.

  David G. Dehaemers, Jr.
  President and Chief Executive Officer

Date: June 14, 2018