As a part of its “Just Vote No” Campaign against the merger between ONEOK, Inc. and Magellan Midstream Partners, Energy Income Partners (EIP) has launched www.votemmp.com, a website in protest of the merger.
EIP, the fourth largest shareholder in Magellan Midstream Partners, remains steadfast in its stance against the proposed merger.
In a press release EIP said, "This isn't a merger that will create a better company; it's trading the excellence of a top-tier company for a mediocre one.”
EIP cites concerns surrounding industrial logic and failure to explore strategic alternatives as issues they have with the merger.
EIP also feels that the deal generates trivial synergies that are more than offset by additional interest charges related to the debt to consummate the deal. Financial projections in the S-4 also show the annualized return on ONEOK's new growth capital invested is just 5%, or that the base business EBITDA is declining. These factors negate arguments that the combined company offers either diversification or a better future than a stand-alone Magellan.
EIP called the merger a “clear case of 'diworsification',” or adding assets to a portfolio simply for the sake of diversification without considering whether those assets will actually benefit the overall investment strategy.