Nut Tree and Caspian Believe Proposed Sale
Significantly Undervalues MMLP
and its Future Prospects
Nut Tree and Caspian Intend to File a Proxy
Statement and Solicit Proxies
to Vote "AGAINST" the Proposed Sale
Nut Tree and Caspian Launch
www.ProtectMMLPValue.com
NEW
YORK, Oct. 22, 2024 /PRNewswire/ -- Nut Tree
Capital Management L.P. ("Nut Tree") and Caspian Capital L.P.
("Caspian"), today announced that
they intend to oppose the proposed sale of Martin Midstream
Partners L.P. ("MMLP" or the "Company") (Nasdaq: MMLP) to Martin
Resource Management Corporation ("MRMC"), an affiliate of the
Company's General Partner, for $4.02
per MMLP common unit not already owned by MRMC. Nut Tree and
Caspian have combined economic
exposure in the Company of approximately 13.2% of the outstanding
common units through certain cash-settled derivative agreements and
are aligned with MMLP unitholders who are unaffiliated with MRMC in
seeking to protect the long-term value of the Company.
Nut Tree and Caspian believe
that the proposed sale price significantly undervalues the Company
and its prospects, and that if the merger is completed on its
current terms, MRMC will receive significant upside for itself that
rightfully belongs to all MMLP unitholders. Nut Tree and
Caspian intend to file a proxy
statement with the Securities and Exchange Commission and solicit
votes "AGAINST" the proposed transaction at the Company's upcoming
special meeting to be held to approve the related merger
agreement.
Additional information can be found at
www.ProtectMMLPValue.com.
Nut Tree and Caspian's serious
concerns with the undervalued and grossly conflicted sale of MMLP
to MRMC are based on the following beliefs:
- MRMC's latest acquisition proposal significantly undervalues
MMLP and its future prospects. Comparable master limited
partnerships, as described in MMLP's own publicly available
investor presentation from May 2024,
traded at approximately 8.5x expected 2024 EBITDA, whereas MRMC's
offer represents an Enterprise Value of only 5.1x management's
expected 2024 EBITDA. Furthermore, when referencing the same peers
and the most recent equity research, that multiple has improved to
9.9x. At a 9.9x multiple, MMLP's common units would be valued 450%
of what MRMC has offered.1 Additionally, based
on MMLP's own public disclosures, we believe a number of
positive developments are likely to come to fruition in the near
and medium term, which will not only result in distributable cash
flow above $1.00/common unit
annually, but also likely result in significant actual cash
distributions to common unitholders—potentially as early as 2025.
Nut Tree and Caspian's views on
MMLP's valuation were detailed in a July 29,
2024 letter to the Conflicts Committee and issued publicly
via a press release the same day.2
- The Conflicts Committee of the Board of Directors (the
"Conflicts Committee") of Martin Midstream GP LLC (the "General
Partner") ran a sham process that did not fully explore potentially
superior alternatives to the sale to MRMC. The Conflicts
Committee, which was formed to address conflicts of interest among
MRMC and MMLP, failed to genuinely engage with us following our
fully financed offer to acquire MMLP for $4.50 per common unit in cash, which represented
a 48% premium over the $3.05 per
common unit offer made by MRMC on May 24,
2024, nor did it respond to any of our diligence-related
questions regarding the value of MMLP. By failing to explore the
potential value flowing to MMLP unitholders under our proposal, or
even to seek our views on valuation, the Conflicts Committee has
brought into question its willingness to act in the best interests
of MMLP common unitholders.
- The Conflicts Committee is grossly conflicted. The
General Partner is wholly owned and controlled by MRMC and its
subsidiaries, and Ruben Martin, III
serves as Chairman of the Board of Directors of the General Partner
and the President, Chief Executive Officer, and Chairman of the
Board of Directors of MRMC. The Conflicts Committee is comprised of
Byron Kelley (Chairman),
James M. Collingsworth and C.
Scott Massey, who have served with
Mr. Martin on the General Partner's Board of Directors for
approximately 12 years, 10 years and 22 years, respectively. The
actions of the Conflicts Committee indicate to us that its members
are too closely tied to Mr. Martin to protect the interests of
MMLP's common unitholders.
Advisors
Olshan Frome Wolosky LLP and Latham &
Watkins LLP are serving as legal counsel to Nut Tree and
Caspian.
About Caspian Capital LP
Caspian Capital LP's absolute
return strategy was founded in 1997 and is focused on performing,
stressed, distressed corporate credit, and value equities.
Caspian currently oversees
$4.6 billion in assets under
management.
About Nut Tree Capital Management LP
Nut Tree Capital,
founded in 2015, implements a fundamentals-based strategy focused
on distressed credit, stressed/event-driven credit and value
equities. Nut Tree currently oversees $4
billion in assets.
Contacts:
For Investors:
John Ferguson/Joe Mills
Saratoga Proxy Consulting LLC
(212) 257-1311
info@saratogaproxy.com
For Media: Jonathan Gasthalter/Nathaniel Garnick
Gasthalter & Co.
(212) 257-4170
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Nut Tree Capital Management L.P., a Delaware limited partnership ("Nut Tree"), and
Caspian Capital L.P., a Delaware
limited partnership ("Caspian"),
together with the other participants named herein, intend to file a
preliminary proxy statement and accompanying proxy card with the
Securities and Exchange Commission ("SEC") to be used to
solicit votes in connection with their opposition to proposals to
be presented at a special meeting of common unitholders of Martin
Midstream Partners L.P., a Delaware limited partnership (the "Company"),
in connection with the Company's agreement and plan of merger with
Martin Resource Management Corporation and certain of its
affiliates.
NUT TREE AND CASPIAN STRONGLY
ADVISE ALL COMMON UNITHOLDERS OF THE COMPANY TO READ THE PROXY
STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY
MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE
AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THIS
PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT
WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES
SHOULD BE DIRECTED TO THE PARTICIPANTS' PROXY SOLICITOR.
The participants in the proxy solicitation are anticipated to be
Nut Tree, Nut Tree Capital Management GP, LLC, a Delaware limited liability company ("Nut Tree
GP"), Jared R. Nussbaum,
Caspian, Caspian Capital GP LLC, a
Delaware limited liability company
("Caspian GP"), Adam Cohen and
David Corleto (collectively, the
"Participants").
As of the date hereof, the Participants have combined economic
exposure in the Company of approximately 13.2% of the outstanding
common units representing limited partnership interests of the
Company ("Common Units"), through notional principal amount
derivative agreements in the form of cash settled swaps with
respect to the Common Units ("Derivative Agreements"). Funds
advised by Nut Tree are party to Derivative Agreements with respect
to an aggregate of 3,245,769 Common Units, and funds advised by
Caspian are party to Derivative
Agreements with respect to an aggregate of 1,916,597 Common Units.
Funds advised by Caspian also hold
$93.15 million principal amount of
the Company's senior secured second lien notes maturing on
February 15, 2028. Nut Tree GP serves
as the general partner of Nut Tree, which serves as the investment
advisor to certain funds. Mr. Nussbaum serves as the Chief
Investment Officer and Managing Partner of Nut Tree and sole member
of Nut Tree GP. Caspian GP serves as the general partner of
Caspian, which serves as the
investment advisor to certain funds. Messrs. Cohen and Corleto each
serve as a control person of each of Caspian and Caspian GP.
1 See Wells Fargo Midstream Energy Weekender: Q3'24
Midstream Earnings Preview October
11, 2024, pg. 7. Permission to use the Wells Fargo
Midstream Energy Update was neither sought nor obtained.
2 https://www.prnewswire.com/news-releases/nut-tree-capital-management-and-caspian-capital-increase-offer-to-purchase-martin-midstream-partners-lp-to-4-50-per-common-unit-in-cash-302208901.html
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SOURCE Nut Tree Capital Management and Caspian Capital