UPDATE 1-Plains All American bids for the rest of PAA Natural Gas Storage
NEW YORK Aug 27 (Reuters) - U.S. pipeline company Plains All American Pipeline LP said it offered around $740 million in stock to buy the 54 percent of PAA Natural Gas Storage LP that it does not already own.
Plains said on Tuesday it sent a proposal to PAA's independent directors that offered the company's unitholders 0.435 common units of Plains All American for each PAA unit. That values the natural gas storage company's units at $22.38 each, a 6 percent premium over their $21.09 value as of Tuesday's close.
In addition to holding 46 percent of PNG's common units, Plains also owns the partnership's general partner, its incentive distribution rights, and all of its Series A and Series B subordinated units.
"It is difficult to predict the timing and extent of a recovery in natural gas storage market conditions," Plains Chief Executive Greg Armstrong said in a statement. "Accordingly, it is clear that the next several years will be challenging for PNG on a stand-alone basis."
PAA acknowledged that it had received the bid and said the bid is subject to the negotiation, execution and approval of a definitive agreement by its board.
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