UPDATE 1-Targa says no longer in discussions with Energy Transfer

Thu Jun 19, 2014 9:17pm EDT

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(Adds Targa's response stating discussions with Energy Transfer terminated, share details)

June 19 (Reuters) - Midstream energy company Targa Resources Corp said on Thursday it is no longer in discussions with Energy Transfer Equity LP, the pipeline company controlled by billionaire Kelcy Warren, regarding a deal.

Targa responded to a Bloomberg report on Thursday that said Energy Transfer is near a deal to buy Houston-based Targa Resources and its energy logistics operating unit Targa Resources Partners LP.

Targa confirmed that the company and its operating unit "previously engaged in high-level preliminary discussions regarding a potential business combination with Dallas-based Energy Transfer Equity, and certain of its affiliates ... (but) those discussions have been terminated," Targa said.

Bloomberg reported that Targa Resources and Targa Resources Partners could be valued at more than $15 billion, citing people familiar with the matter.

The deal involved another midstream energy company, Regency Energy Partners LP, which is controlled by Energy Transfer, the report said.

The deal, in cash and stock, could have been one of the largest ever arranged by Warren, Bloomberg reported.

Targa Resources has a market value of $6.35 billion and Targa Resources Partners has a market capitalization of $9.51 billion.

Representatives for Energy Transfer could not be immediately reached for a comment.

Earlier this week, pipeline company Williams Cos Inc agreed to acquire control of natural gas and oil gathering services provider Access Midstream Partners LP for $5.99 billion, aiming to enlarge its role in the U.S. natural gas boom.

Shares of Targa Resources were down 12.25 percent at $132.10 in extended trading on Thursday, and those of Targa Resources Partners fell 10.23 percent at $73.20. (Reporting by Ankit Ajmera in Bangalore; Editing by Maju Samuel, Cynthia Osterman and Ken Wills)

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