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Frank Semple's Decision To Merge With MPLX -And MPCSometimes we don't know what went on behind the closed green door until they open the door and let us see --and then we can try to start to understand the mysteries. This is my opinion on what I think was going on and why Frank Semple made the moves he did. 1) The oil and gas price drop made MWE's customers vulnerable. That indirectly made MWE vulnerable-because MWE had to commit to continuing the growth for their customers 2) A lot of predators around that would be willing to scoop up MWE in a taxable transaction that would not be pretty taxwise for the long term MWE holders. 3) The alternative was to find a large new home _But not too large. Something in the middle that MWE would be meaningful to the buyer's overall growth. Someone that is growing at a reapid rate and MWE's rapid growth would accelerate the buyer's growth. 4) So Frank went digging around and came up with a tax-free exchange with MPLX who is supported by MPC. MPLX is on track to grow their distribution 29% in 2015-25% in 2016 and 2017 and then 20% in 2018 and 2019. So they are growing at a very favorable rate.------- And then today MPC just raised their own dividend 28% from $0.25 to $0.32 per quarter. These increased payouts are from before factoring in the MWE DCF which will expand the returs going forward So it appears that both MPC and MPLX have the same investor friendly style that is first on Frank Semple's thoughts. In addition to the TAX FREE EXCHANGE Frank has found us a home where we can continue shareing in the future of MWE's growth under the MPC-MPLX umbrella. b&w |
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Msg # | Subject | Author | Recs | Date Posted |
52666 | Re: Frank Semple's Decision To Merge With MPLX -And MPC | moneyonomics | 1 | 7/29/2015 7:12:40 PM |