Special Meeting of Shareholders Set for
Sept. 21, 2023
ONEOK's Board of Directors Recommends
Shareholders Vote "FOR" All Proposals at the
Special Meeting
TULSA,
Okla., July 25, 2023 /PRNewswire/ -- ONEOK, Inc.
(NYSE: OKE) ("ONEOK") today announced that it has filed definitive
proxy materials with the U.S. Securities and Exchange Commission
(the "SEC") in connection with ONEOK's pending acquisition of
Magellan Midstream Partners, L.P. (NYSE: MMP) ("Magellan").
The ONEOK Special Meeting of Shareholders (the "Special
Meeting") is scheduled to take place on Sept. 21, 2023, at 9:00
a.m. Central Time (10:00 a.m. Eastern
Time). The Special Meeting will be held virtually.
All shareholders of record of ONEOK common stock as of the close
of business on July 24, 2023, will be
entitled to vote their shares by proxy at the Special
Meeting. The ONEOK board of directors unanimously recommends
that shareholders vote "FOR" all proposals provided in
detail in the definitive proxy statement. Proxy materials are
expected to be mailed on or about July 28,
2023.
As previously announced on May 14,
2023, ONEOK will acquire all outstanding units of Magellan
in a cash-and-stock transaction consisting of $25.00 in cash and 0.667 shares of ONEOK common
stock for each outstanding Magellan common unit.
The combination of ONEOK and Magellan will create a diversified
North American midstream infrastructure company with predominately
fee-based earnings, a strong balance sheet and significant
financial flexibility focused on delivering essential energy
products and services to its customers, and continued strong
returns to investors.
Highlights of the transaction include:
- Brings together two premier energy infrastructure businesses
with strong returns on invested capital and diverse free cash flow
generation: The transaction adds a leading, and primarily
fee-based, refined products and crude oil transportation business
to ONEOK. Magellan's stable, primarily demand-driven businesses are
expected to generate significant free cash flow due to low capital
expenditure requirements. This acquisition creates a more resilient
energy infrastructure company that is expected to produce stable
cash flows through diverse commodity cycles.
- Compelling long-term value proposition driven by consistent
and disciplined capital allocation philosophy: The combined
company is expected to experience a step change in free cash flow
after dividends and growth capital by generating an average annual
amount of approximately $1.0 billion
in the first four years following the expected transaction close.
The increase in free cash flow will provide additional cash for
debt reduction, growth capital and value returned to shareholders
through dividends and/or repurchasing shares. ONEOK remains
committed to growing both EPS and its common dividend while
targeting a payout ratio of less than 85%.
- Expect to achieve immediate financial benefits, including
cost, operational and tax synergies, supporting meaningful expected
accretion: The transaction is expected to be earnings per share
(EPS) accretive beginning in 2024 with EPS accretion of 3% to 7%
per year from 2025 through 2027, and free cash flow per share
accretion averaging more than 20% from 2024 through 2027. Base
forecasted synergies are expected to total at least $200 million annually.
From a tax perspective, ONEOK expects to benefit
from the step-up in Magellan's tax basis from the transaction, thus
deferring the expected impact of the new corporate alternative
minimum tax from 2024 to 2027. The benefit from the basis step-up
has an estimated total value of approximately $3.0 billion, which has an estimated net present
value of approximately $1.5 billion.
Utilization of expected tax attributes could increase if additional
capital projects are put into service or acquisitions are
completed, which may increase the net present value of future tax
deferrals.
- Complementary and diversified asset positions with potential
for additional cost and commercial synergies over time: The
combined company will own more than 25,000 miles of
liquids-oriented pipelines, with significant assets and operational
expertise at the Gulf Coast and Mid-Continent market hubs. ONEOK
anticipates this combined liquids-focused portfolio will present
significant potential for enhanced customer product offerings and
increased international export opportunities. We believe these
activities could potentially result in total annual transaction
synergies exceeding $400 million
within two to four years.
- Strong investment-grade credit ratings with enhanced scale
and diversification: The combined company expects pro-forma
2024 year-end net debt-to-EBITDA of approximately 4.0 times. ONEOK
expects leverage to decrease below 3.5 times by 2026 as future
growth projects are placed in service. Excluding certain large
projects that have not yet received a final investment decision
from the expected net debt-to-EBITDA calculation would accelerate
the timeframe to achieve 3.5 times by approximately one year.
On June 27, 2023, ONEOK
announced the expiration of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976.
The transaction is expected to close in the third quarter of
2023, subject to approval by both ONEOK shareholders and Magellan
unitholders, and other customary closing conditions.
ONEOK shareholders who need assistance voting or have questions
regarding the Special Meeting may contact ONEOK's proxy
solicitor:
Innisfree M&A Incorporated:
- Shareholders may call toll free: 877-750-9499
- Banks and Brokers may call collect: 212-750-5833
ONEOK, Inc. (pronounced ONE-OAK) (NYSE: OKE) is a leading
midstream service provider and owns one of the nation's premier
natural gas liquids (NGL) systems, connecting NGL supply in the
Rocky Mountain, Permian and Mid-Continent regions with key market
centers and owns an extensive network of gathering, processing,
fractionation, transportation and storage assets.
ONEOK is a FORTUNE 500 company and is included in the S&P
500.
For information about ONEOK, visit the website:
www.oneok.com.
IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND
IT:
In connection with the proposed merger (the "Proposed
Transaction") between ONEOK and Magellan, ONEOK filed with the SEC
a registration statement on Form S-4 (as amended, the "Registration
Statement") to register the shares of ONEOK's common stock to be
issued in connection with the Proposed Transaction. The
Registration Statement includes a document that serves as a
prospectus of ONEOK and joint proxy statement of ONEOK and Magellan
(the "joint proxy statement/prospectus"), and each party will file
other documents regarding the Proposed Transaction with the
SEC.
INVESTORS AND SECURITY HOLDERS OF ONEOK AND MAGELLAN ARE
URGED TO CAREFULLY AND THOROUGHLY READ THE REGISTRATION STATEMENT,
THE JOINT PROXY STATEMENT/PROSPECTUS, AS EACH MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED
BY ONEOK AND MAGELLAN WITH THE SEC BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT ONEOK AND MAGELLAN, THE PROPOSED
TRANSACTION, THE RISKS RELATED THERETO AND RELATED MATTERS.
The Registration Statement was declared effective by the SEC on
July 24, 2023, and ONEOK and Magellan
mailed the joint proxy statement/prospectus to their respective
stockholders on or about July 25,
2023. Investors will be able to obtain free copies of the
Registration Statement and the joint proxy statement/prospectus, as
each may be amended from time to time, and other relevant documents
filed by ONEOK and Magellan with the SEC (when they become
available) through the website maintained by the SEC at
www.sec.gov. Copies of documents filed with the SEC by ONEOK,
including the joint proxy statement/prospectus (when available),
will be available free of charge from ONEOK's website at
www.oneok.com under the "Investors" tab. Copies of documents filed
with the SEC by Magellan, including the joint proxy
statement/prospectus (when available), will be available free of
charge from Magellan's website at www.magellanlp.com under the
"Investors" tab.
PARTICIPANTS IN THE SOLICITATION:
ONEOK and certain of its directors, executive officers and other
members of management and employees, Magellan, and certain of the
directors, executive officers and other members of management and
employees of Magellan GP, LLC, which manages the business and
affairs of Magellan, may be deemed to be participants in the
solicitation of proxies from ONEOK's shareholders and the
solicitation of proxies from Magellan's unitholders, in each case
with respect to the Proposed Transaction. Information about ONEOK's
directors and executive officers is available in ONEOK's Annual
Report on Form 10-K for the 2022 fiscal year filed with the SEC on
February 28, 2023, and its definitive
proxy statement for the 2023 annual meeting of stockholders filed
with the SEC on April 5, 2023, and in
the joint proxy statement/prospectus. Information about Magellan's
directors and executive officers is available in its Annual Report
on Form 10-K for the 2022 fiscal year and its definitive proxy
statement for the 2023 annual meeting of unitholders, each filed
with the SEC on February 21, 2023,
and the joint proxy statement/prospectus. Other information
regarding the participants in the solicitations and a description
of their direct and indirect interests, by security holdings or
otherwise, are contained in the Registration Statement, the joint
proxy statement/prospectus and other relevant materials to be filed
with the SEC regarding the Proposed Transaction when they become
available. Shareholders of ONEOK, unitholders of Magellan,
potential investors and other readers should read the joint proxy
statement/prospectus carefully before making any voting or
investment decisions.
NO OFFER OR SOLICITATION:
This communication is not intended to and shall not constitute
an offer to sell or the solicitation of an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer 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").
FORWARD-LOOKING STATEMENTS:
This communication contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act and Section 21E of
the Securities Exchange Act of 1934, as amended. All statements,
other than statements of historical fact, included in this
communication that address activities, events or developments that
ONEOK or Magellan expects, believes or anticipates will or may
occur in the future are forward-looking statements. Words such as
"estimate," "project," "predict," "believe," "expect,"
"anticipate," "potential," "create," "intend," "could," "would,"
"may," "plan," "will," "guidance," "look," "goal," "future,"
"build," "focus," "continue," "strive," "allow" or the negative of
such terms or other variations thereof and words and terms of
similar substance used in connection with any discussion of future
plans, actions, or events identify forward-looking statements.
However, the absence of these words does not mean that the
statements are not forward-looking. These forward-looking
statements include, but are not limited to, statements regarding
the Proposed Transaction, the expected closing of the Proposed
Transaction and the timing thereof and as adjusted descriptions of
the post-Transaction company and its operations, strategies and
plans, integration, debt levels and leverage ratio, capital
expenditures, cash flows and anticipated uses thereof, synergies,
opportunities and anticipated future performance, including
maintaining current ONEOK management, enhancements to
investment-grade credit profile, an expected accretion to earnings
and free cash flow, dividend payments and potential share
repurchases, increase in value of tax attributes and expected
impact on EBITDA. Information adjusted for the Proposed Transaction
should not be considered a forecast of future results. There are a
number of risks and uncertainties that could cause actual results
to differ materially from the forward-looking statements included
in this communication. These include the risk that ONEOK's and
Magellan's businesses will not be integrated successfully; the risk
that cost savings, synergies and growth from the Proposed
Transaction may not be fully realized or may take longer to realize
than expected; the risk that the credit ratings of the combined
company or its subsidiaries may be different from what the
companies expect; the possibility that shareholders of ONEOK may
not approve the issuance of new shares of ONEOK common stock in the
Proposed Transaction or that shareholders of ONEOK or unitholders
of Magellan may not approve the Proposed Transaction; the risk that
a condition to closing of the Proposed Transaction may not be
satisfied, that either party may terminate the Merger Agreement or
that the closing of the Proposed Transaction might be delayed or
not occur at all; potential adverse reactions or changes to
business or employee relationships, including those resulting from
the announcement or completion of the Proposed Transaction; the
parties do not receive regulatory approval of the Proposed
Transaction; the occurrence of any other event, change or other
circumstances that could give rise to the termination of the Merger
Agreement relating to the Proposed Transaction; the risk that ONEOK
may not be able to secure the debt financing necessary to fund the
cash consideration required for the Proposed Transaction; the risk
that changes in ONEOK's capital structure and governance could have
adverse effects on the market value of its securities; the ability
of ONEOK and Magellan to retain customers and retain and hire key
personnel and maintain relationships with their suppliers and
customers and on ONEOK's and Magellan's operating results and
business generally; the risk the Proposed Transaction could
distract management from ongoing business operations or cause ONEOK
and/or Magellan to incur substantial costs; the risk that ONEOK may
be unable to reduce expenses or access financing or liquidity; the
impact of the COVID-19 pandemic, any related economic downturn and
any related substantial decline in commodity prices; the risk of
changes in governmental regulations or enforcement practices,
especially with respect to environmental, health and safety
matters; and other important factors that could cause actual
results to differ materially from those projected. All such factors
are difficult to predict and are beyond ONEOK's or Magellan's
control, including those detailed in ONEOK's Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K that are available on ONEOK's website at www.oneok.com and on
the website of the SEC at www.sec.gov, and those detailed in
Magellan's Annual Reports on Form 10-K, Quarterly Reports on Form
10- Q and Current Reports on Form 8-K that are available on
Magellan's website at www.magellanlp.com and on the website of the
SEC. All forward-looking statements are based on assumptions that
ONEOK and Magellan believe to be reasonable but that may not prove
to be accurate. Any forward-looking statement speaks only as of the
date on which such statement is made, and neither ONEOK nor
Magellan undertakes any obligation to correct or update any
forward-looking statement, whether as a result of new information,
future events or otherwise, except as required by applicable law.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date
hereof.
Analyst
Contact:
|
Andrew Ziola
|
|
918-588-7683
|
Shareholder
Contact:
|
Innisfree M&A
|
|
877-750-9499
|
Media
Contact:
|
Brad Borror
|
|
918-588-7582
|
View original
content:https://www.prnewswire.com/news-releases/oneok-announces-filing-of-definitive-proxy-statement-in-connection-with-its-pending-acquisition-of-magellan-midstream-partners-301885084.html
SOURCE ONEOK, Inc.