Crestwood Equity Partners LP (NYSE: CEQP) (“Crestwood”) today announced the receipt of consents from holders of record of its outstanding 9.250% Perpetual Preferred Units (the “Preferred Units”) (CUSIP/ISIN: 226344307 / US2263443077) as of September 22, 2023 (collectively, the “Preferred Holders”) necessary to approve the proposed amendment (the “Proposed Amendment”) to Crestwood’s Sixth Amended and Restated Agreement of Limited Partnership, dated August 20, 2021, in connection with its previously announced solicitation of consents (the “Consent Solicitation”). As of 4:00 p.m., Eastern Time, on October 24, 2023 (the “Effective Time”), Preferred Holders of the requisite number of the issued and outstanding Preferred Units had validly delivered and not revoked consents to the Proposed Amendment. The ability of Preferred Holders to revoke validly delivered consents terminated upon the occurrence of the Effective Time. The Consent Solicitation will expire at 5:00 p.m., Eastern Time, on October 25, 2023 (the “Expiration Date”).
As previously announced, on August 16, 2023, Crestwood entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Energy Transfer LP (“Energy Transfer”), Pachyderm Merger Sub LLC, a direct wholly owned subsidiary of Energy Transfer (“Merger Sub”), and, solely for the purposes of Sections 2.1(a), 2.1(b), 2.1(c) and 5.21 thereof, LE GP, LLC, pursuant to which Crestwood will merge with and into Merger Sub (the “Merger”), with Merger Sub surviving the Merger as a direct wholly owned subsidiary of Energy Transfer. The Consent Solicitation is being conducted in connection with the Merger and at the direction of Energy Transfer.
As described in Crestwood’s Consent Solicitation Statement, dated September 27, 2023 (the “Statement”), upon effectiveness, the Proposed Amendment will, among other things, (i) increase the cash redemption price for the Preferred Units in connection with a cash redemption election in the Merger from $9.218573 to $9.857484 per Preferred Unit and (ii) conform certain terms of the Preferred Units with Energy Transfer’s other outstanding series of preferred units in order to simplify its capital structure following the Merger. As previously announced, the deadline for Preferred Holders to elect the form of merger consideration they wish to receive in the Merger is 5:00 p.m., Eastern Time, on October 31, 2023.
The Preferred Holders of at least two-thirds of the issued and outstanding Preferred Units required to approve the Proposed Amendment validly delivered and did not revoke consents to the Proposed Amendment. Accordingly, the Proposed Amendment will go into effect if the conditions to the Merger (the “Conditions”) are satisfied or waived, as applicable, by the parties to the Merger Agreement and the Merger Agreement is not otherwise terminated. However, if the Conditions are not satisfied or waived, as applicable, by the parties to the Merger Agreement or the Merger Agreement is otherwise terminated, the Proposed Amendment will not become effective and the Consent Fee (as defined below) will not be paid.
Subject to the terms and conditions of the Consent Solicitation, Crestwood will pay each Preferred Holder who validly delivered (and did not revoke) its consent on or prior to the Expiration Date, a cash payment equal to $0.182546 for each Preferred Unit with respect to which consents have been received (and not revoked) (the “Consent Fee”).
Crestwood will pay registered brokers and dealers in the United States that delivered consents in the Consent Solicitation from The Depository Trust Company participants and persons resident in the United States (the “Retail Soliciting Dealers”) retail soliciting fees. Each Retail Soliciting Dealer that successfully delivered consents from a retail beneficial owner of the Preferred Units is eligible to receive a fee (the “Retail Soliciting Fee”) from Crestwood equal to $0.0456365 for each Preferred Unit for which a consent was validly delivered and not revoked by or on behalf of such retail beneficial owner, except for any Preferred Units for which consents were delivered by a Retail Soliciting Dealer for its own account. The Retail Soliciting Fee will only be paid to each Retail Soliciting Dealer in respect of beneficial owners who delivered consents in respect of Preferred Units in an aggregate amount of 25,000 Preferred Units or fewer. Crestwood expects to pay, or cause to be paid, the Consent Fee and Retail Soliciting Fee on or about November 3, 2023.
BofA Securities is the Solicitation Agent in the Consent Solicitation and D.F. King & Co., Inc. has been retained to serve as the Information and Tabulation Agent. Persons with questions regarding the Consent Solicitation should contact BofA Securities at 888-292-0070 (toll free) or 980-387-3907 (collect) or debt_advisory@bofa.com. Requests for the Statement should be directed to D.F. King & Co., Inc. at 212-269-5550 (Banks and Brokers), 800-290-6424 (All Others Toll Free) or by email at ceqp@dfking.com.
No Offer or Solicitation
None of Crestwood, the Solicitation Agent or the Information and Tabulation Agent makes any recommendation as to whether the Preferred Holders should deliver any consents. Each Preferred Holder must make its own decision as to whether or not to deliver consents.
This communication is for informational purposes only and is not intended to, and shall not constitute an offer to sell or the solicitation of an offer to buy, or a solicitation of any vote, consent or approval with respect to any securities, including the Preferred Units, nor shall there be any offer, issuance, exchange, transfer, solicitation or sale of securities in any jurisdiction in which such offer, issuance, exchange, transfer, solicitation or sale would be in contravention of applicable law. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended (the “Securities Act”). The Consent Solicitation is being made solely by the Statement and subject to the terms and conditions stated therein.
