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October 25, 2011 6:04 PM
V&E, Wachtell Land Roles as Plains Makes Hostile $1 Billion Bid for SemGroup
Posted by Tom Huddleston Jr.
Spurned by the board of rival SemGroup, Plains All American Pipeline said Monday that it will take its $1 billion buyout offer directly to the oil and gas company's shareholders.
Houston-based Plains is offering to pay $24 per SemGroup share in cash to acquire its Tulsa-based competitor. Plains says the unsolicited takeover offer represents a 16 percent premium over the target company's average stock price during the two weeks before the bid, which SemGroup's board rejected on October 19, was disclosed.
On Monday, SemGroup said in a statement that the offer "substantially undervalued the company" and that it "is willing to consider any transaction that reflects the [SemGroup's] full and fair value."
Plains has hired Vinson & Elkins and Wilmington, Delware–based firm Morris, Nichols, Arsht & Tunnell to advise on the matter. The V&E team is being led by Houston-based M&A partners Jeffery Floyd and Alan Beck, with assistance from tax partner John Lynch and antitrust partner William Vigdor. V&E's past corporate work for Plains includes advising the company on its $205 million acquisition of Andrews Petroleum in 2006. Lawrence Dreyfuss is general counsel for Plains.
Wachtell, Lipton, Rosen & Katz is SemGroup's legal adviser. Corporate partner David Katz is leading the Wachtell team. Candice Cheeseman is SemGroup's general counsel.
Plains made an unsuccessful attempt to acquire SemGroup last year with a $17-per-share offer. At the time, SemGroup was in the middle of a reorganization after emerging from bankruptcy in 2009.
The energy industry has seen a string of major transactions recently. Last week, The Am Law Daily reported on at least three large deals: Kinder Morgan acquired El Paso Corporation in a $38 billion deal; Norway's Statoil agreed to pay $4.4 billion in cash for Austin–based Brigham Exploration; and AmeriGas Partners said that it will expand its operations by acquiring the propane unit of Energy Transfer Partners for $2.9 billion.
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