Plains All American Taking IPO Spin-off Route (PAA)

Plains All American Pipeline, L.P. (NYSE: PAA) is pursuing a spin-off strategy which we have seen elsewhere in the energy patch, but it is a strategy that we saw mostly in 2008.   The group announced that it plans to have an IPO of common units representing limited partner interests of PAA Natural Gas Storage, L.P.  This is its master limited partnership subsidiary to be formed by PAA to own and operate its natural gas storage assets and business.

The group said in the press release that it expects to file a registration statement for the IPO with the SEC during the first quarter of 2010.   PAA will own the 2% general partner interest and incentive distribution rights of PNGS.  It also expects to retain a substantial portion of the MLP’s common and subordinated units. PAA anticipates using the proceeds of the IPO to repay debt and for general partnership purposes.

Plains has a current market capitalization rate of some $7.3 billion and shares are up 0.55% at $53.81 right after the open of the market.  The 52-week trading range is $34.00 to $54.96.

You are invited to join our free daily email distribution list to hear about IPOs and secondary offerings, ongoing day trader and options trader alerts, analyst upgrades and downgrades, stock and market rumors, Buffett and guru investor news, M&A and more.

JON C. OGG