Announced today:

http://www.marketwatch.com/news/story/suburban-propane-partners-lp-sell/story.aspx?guid={00D1DF45
-C787-4F80-B9A7-6FBEEA1D6BEC}&dist=TQP_Mod_pressN

My take is that this is basically a sale-leaseback that generates $55M in cash today but will increase their leasing costs in the future. The question is why do it? They don't need cash to finance current operations--they didn't touch their $124M credit line at all this year, compared with $31M in average borrowings during the first three quarters of 2006. They can't prepay their Senior Notes until the end of calendar 2008 at the earliest, though I suppose they could buy them in the open market. They're entering into the Winter season, when the cash really flows.

My guess is that they'd like to acquire something big and they have a specific target in mind. Add the $55M above to their untapped credit line and you begin to have an idea how much might be in their war chest. And their timing might be pretty good, given that the P/E firms and hedgies seem to have largely exited the MLPs.

In the MLP world, acquisitions usually mean increases in distributions by the acquiror. SPH already is one of my largest positions; I wasn't going to add to it--but now...maybe it is time to break a rule!

I know this is a sleepy board, but maybe someone has an opinion?