Energy

Cheniere Rolls Up Subsidiary for 1% Premium

Paul Ausick

Published: May 17, 2018 11:50 am

Last Updated: January 11, 2020 11:28 pm

Cheniere Energy Inc. (NYSEAMERICAN: LNG) announced Thursday morning that it is acquiring the approximately 8.1% of subsidiary Cheniere Energy Partners Holdings LLC (NYSEAMERICAN: CQH) that it does not already own in an all-stock deal valued at $28.24 per share of Cheniere Partners Holdings.

Shareholders in the acquired company will receive 0.45 shares of Cheniere Energy stock for each share of Cheniere Energy Holdings they own. The transaction is expected to be tax-free to Cheniere Energy Holdings shareholders.

Cheniere Energy Holdings’ sole asset is an approximate 48.6% limited partner interest in Cheniere Energy Partners LP (NYSEAMERICAN: CQP).

Cheniere Partners is constructing and operating natural gas liquefaction facilities at the Sabine Pass LNG terminal in the Gulf of Mexico. The company plans to construct up to six natural gas liquefaction trains, which are in various stages of development, construction and operations. Trains 1 through 4 are operational, Train 5 is under construction and Train 6 is being commercialized and has all necessary regulatory approvals in place.

Each liquefaction train is expected to have a nominal production capacity, before adjustments for planned maintenance, production reliability and potential overdesign, of approximately 4.5 million tons annually of liquefied natural gas (LNG) and an adjusted nominal production capacity of approximately 4.3 million to 4.6 million tons per year of LNG. Cheniere Partners also owns and operates regasification facilities at the Sabine Pass LNG terminal and the Creole Trail Pipeline, which connects the Sabine Pass LNG terminal with a number of large interstate pipelines.

As of earlier this month, more than 97% of Cheniere Energy stock was owned by institutional investors, with Carl Icahn’s nearly 14% stake being the largest.

Cheniere Energy Holdings shares traded up about 2% in the late morning Thursday, at $28.51 in a 52-week range of $24.03 to $29.73.

Common units of Cheniere Energy Partners traded up about 0.6% to $32.77, in a 52-week range of $26.41 to $33.47, and Cheniere Energy shares traded down about 1% at $62.13.

As of Thursday’s close, Cheniere Energy stock has posted a 12-month gain of about 27% while Cheniere Energy Holdings showed a gain of 11.5% and Cheniere Energy Partners has added less than 3%.