exv99w1
Exhibit 99.1
ENERGY TRANSFER EQUITY AND SOUTHERN UNION ANNOUNCE IMPROVED AGREEMENT FOR $9.4 BILLION,
INCLUDING $5.7 BILLION IN CASH AND ETE COMMON UNITS
Agreement provides Southern Union shareholders $44.25 per share in cash or significant potential
upside in owning ETE common units
DALLAS and HOUSTON July 19, 2011 Energy Transfer Equity, L.P. (NYSE:ETE) and Southern Union
Company (NYSE:SUG) today announced that they have entered into an amended and restated merger
agreement under which ETE will acquire SUG for $9.4 billion, including $5.7 billion in cash and ETE
common units.
Under the terms of the revised agreement, which has been unanimously approved by the boards of
directors of both companies, SUG shareholders can elect to exchange their common shares for $44.25
of cash or 1.000x ETE common unit. The maximum cash component is 60% of the aggregate
consideration and the common unit component can fluctuate between 40% and 50%. Elections in excess
of either the cash or common unit limits will be subject to proration.
Our ability to be creative with our structure has improved the tax efficiency, therefore allowing
us to increase our price, said Kelcy Warren, ETEs Chairman of the Board of Directors and largest
unitholder. This is simply a superior transaction with upside potential and the ability to close
on an expedited basis. The terms of this revised agreement demonstrate our commitment to executing
this transaction.
ETE has received revised support agreements in connection with the revised merger agreement from
shareholders representing 14% of SUGs total shares outstanding, who have agreed to pre-elect to
receive ETE common units as their consideration, subject to the same proration as all other
shareholders.
George L. Lindemann, Chairman and CEO of SUG, said, This revised merger agreement provides our
shareholders with superior value, greater certainty to close, and unrivalled strategic benefits
that could not be achieved through any other industry combination.
Eric D. Herschmann, Vice Chairman, President and COO of SUG, added, We have negotiated the most
compelling transaction for Southern Union shareholders, both in terms of immediate cash value and
potential upside of the combined companies through long-term equity ownership in ETE.
The revised merger agreement provides, at the SUG shareholders option, certainty of value through
substantial cash consideration per SUG share and significant potential upside from ETE common units
at a compelling fixed exchange ratio and on a tax-deferred basis. The merger is not subject to any
financing condition and is supported by approximately $3.7 billion in committed financing from
Credit Suisse.
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In connection with the revised merger agreement, ETE has signed an amended drop down agreement to
sell SUGs 50% interest in Citrus Corp., which owns 100% of the Florida Gas Transmission pipeline
system, to Energy Transfer Partners, L.P. (NYSE: ETP) for total consideration of $2.0 billion. The
obligations of ETE are to be assumed by SUG immediately prior to closing of the ETE/SUG merger. The
proceeds received will be used to fund a portion of the merger consideration and to repay existing
SUG-related debt to maintain appropriate investment grade credit metrics. The sale of this interest
in Citrus Corp. is not subject to any financing condition on the part of ETP or ETP unitholder
approval and is not a condition to the consummation of the SUG merger.
As previously announced, in a sign of its commitment and confidence that it can complete this
transaction in or before the first quarter of 2012, ETE has agreed to divest businesses, to the
extent required by regulators, to ensure federal anti-trust approvals for the proposed ETE / SUG
transaction will not delay or prohibit the closing. ETE has already begun the approval process
with its S-4 Proxy Filing, HSR and Missouri regulatory filings.
Credit Suisse Securities (USA) LLC acted as exclusive financial advisor to ETE, with Latham &
Watkins LLP, Bingham McCutchen LLP and Potter Anderson having acted as legal counsel.
Evercore Partners and Goldman Sachs Group Inc are serving as financial advisors to the Special
Committee of the board of directors of SUG. Sullivan & Cromwell LLP and Morris Nichols Arhst and
Tunnell LLP are serving as legal advisors to the Special Committee. Locke Lord Bissell & Liddell
LLP and Roberts & Holland LLP are serving as legal counsel to SUG.
Energy Transfer Equity, L.P. (NYSE:ETE) is a publicly traded partnership, which owns the general
partner and 100 percent of the incentive distribution rights (IDRs) of ETP and approximately 50.2
million ETP limited partner units; and owns the general partner and 100 percent of the IDRs of RGNC
and approximately 26.3 million RGNC limited partner units. For more information, visit the Energy
Transfer Equity, L.P. web site at www.energytransfer.com.
Energy Transfer Partners, L.P. (NYSE:ETP) is a publicly traded partnership owning and operating a
diversified portfolio of energy assets. ETP has pipeline operations in Arizona, Arkansas, Colorado,
Louisiana, New Mexico, Utah and West Virginia and owns the largest intrastate pipeline system in
Texas. ETP currently has natural gas operations that include more than 17,500 miles of gathering
and transportation pipelines, treating and processing assets, and three storage facilities located
in Texas. ETP also holds a 70 percent interest in Lone Star NGL LLC (Lone Star), a joint venture
that owns and operates NGL storage, fractionation and transportation assets in Texas, Louisiana and
Mississippi. ETP is also one of the three largest retail marketers of propane in the United
States, serving more than one million customers across the country. For more information, visit
the Energy Transfer Partners, L.P. web site at www.energytransfer.com.
Regency Energy Partners LP (NASDAQ:RGNC) is a growth-oriented, midstream energy partnership engaged
in the gathering, contract compression, processing, marketing and transporting of natural gas and
natural gas liquids. RGNC also owns the remaining 30 percent interest in Lone Star. RGNCs general
partner is owned by ETE. For more information, visit the Regency Energy Partners LP web site at
www.regencyenergy.com.
Southern Union Company (NYSE:SUG), headquartered in Houston, is one of the nations leading
diversified natural gas companies, engaged primarily in the transportation, storage, gathering,
processing and distribution of natural gas. The company owns and operates one of the
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nations largest natural gas pipeline systems with more than 20,000 miles of gathering and
transportation pipelines and one of North Americas largest liquefied natural gas import terminals,
along with serving more than half a million natural gas end-user customers in Missouri and
Massachusetts. For further information, visit www.sug.com.
Forward-Looking Statements
This press release may include certain statements concerning expectations for the future, including
statements regarding the anticipated benefits and other aspects of the proposed transactions
described above, that are forward-looking statements as defined by federal law. Such
forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and
other factors that are difficult to predict and many of which are beyond the control of the
management teams of ETE, ETP, RGNC or SUG. Among those is the risk that conditions to closing the
transactions are not met or that the anticipated benefits from the proposed transactions cannot be
fully realized. An extensive list of factors that can affect future results are discussed in the
reports filed with the Securities and Exchange Commission by ETE, ETP, RGNC and SUG. Neither ETE,
ETP, RGNC nor SUG undertakes any obligation to update or revise any forward-looking statement to
reflect new information or events.
Additional Information
In connection with the transaction, ETE and SUG have filed a proxy statement / prospectus and other
documents with the SEC. Investors and security holders are urged to carefully read the definitive
proxy statement / prospectus because it contains important information regarding ETE, SUG and the
transaction.
A definitive proxy statement / prospectus will be sent to stockholders of SUG seeking their
approval of the transaction. Investors and security holders may obtain a free copy of the
definitive proxy statement / prospectus and other documents filed by ETE and SUG with the SEC at
the SECs web site, www.sec.gov. The definitive proxy statement / prospectus and such
other documents relating to ETE may also be obtained free of charge by directing a request to
Energy Transfer Equity, L.P., Attn: Investor Relations, 3738 Oak Lawn Avenue, Dallas, Texas 75219,
or from ETEs web site, www.energytransfer.com. The definitive proxy statement /
prospectus and such other documents relating to SUG may also be obtained free of charge by
directing a request to Southern Union Company, Attn: Investor Relations, 5444 Westheimer Road,
Houston, Texas 77056, or from SUGs web site, www.sug.com.
ETE, SUG and their respective directors and executive officers may, under the rules of the SEC, be
deemed to be participants in the solicitation of proxies in connection with the proposed
transaction. Information concerning the interests of the persons who may be participants in the
solicitation is set forth in the proxy statement / prospectus.
The information contained in this press release is available on the ETE web site at
www.energytransfer.com.
Energy Transfer Equity
Investors:
Energy Transfer Equity
Brent Ratliff
(214) 981-0700
MacKenzie Partners
Dan Burch / Lawrence Dennedy
(212) 929-5748 / (212) 929-5239
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Media:
Brunswick Group
Steve Lipin / Mark Palmer
(212) 333-3810 / (214) 459-8181
Granado Communications Group
Vicki Granado
(214) 599-8785
Southern Union Company
Investors:
Richard N. Marshall
(713) 989-2000
Media:
John P. Barnett
(713) 989-7556
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