HOUSTON — Enterprise Products Partners plans to buy natural-gas-services provider Duncan Energy Partners in an all-stock deal that values Duncan at $2.4 billion.
Enterprise Products and Duncan Energy provide pipeline, transport and storage services for natural gas, oil, refined products and petrochemicals.
Enterprise, which was founded in 1968 by billionaire energy tycoon Dan Duncan,already owns Duncan’s general partner and 58 percent of Duncan’s units outstanding. The Houston petroleum-services company formed Duncan as a limited partnership in 2007. It is now proposing to own it 100 percent by offering to acquire the remaining units at an exchange rate of 0.9545 Enterprise units for each Duncan.
The companies said the deal was worth roughly $42 per unit, a 29 percent premium to Duncan’s closing price Tuesday. Duncan shares soared 24 percent, or $7.84, to close Wednesday at $40.40. Enterprise shares fell 1.7 percent, or 73 cents, to $42.97.
Duncan’s board of directors is reviewing the proposal.
Enterprise owns 50,200 miles of onshore and offshore petroleum pipelines, 192 million barrels of storage for crude, natural-gas liquids and refined products, and 27 billion cubic feet of natural gas storage.
Business, Pages 28 on 02/24/2011