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Nut Tree Capital Management LP and Caspian Capital LP have an increased their offer to acquire Kilgore, Texas-based Martin Midstream Partners (MMLP) for $175 million, the firms said on July 29.
Nut Tree and Caspian’s proposal represents a 48% premium over the $3.05 per common unit offer made in May by Martin Resource Management (MRMC), or $100.3 million.
Nut Tree and Caspian’s latest proposal ups by $0.50 the firms’ initial $4 per unit offer made on July 11. That deal would have paid roughly $131 million cash for MMLP’s outstanding units.
Nut Tree and Caspian said their new proposal is “vastly superior” to MRMC's. Martin Resource’s offer “significantly undervalues MMLP and its future prospects.”
The firms argue that MMLP unitholders that are unaffiliated with MRMC will find Nut Tree and Caspian's proposal more compelling, while providing equal or greater transaction certainty, according to a release on July 29.
MRMC has been unwilling to budge on attempts by the firms to counteroffer its original proposal.
On July 11, Sharon L. Taylor, CFO for Martin Midstream Partners, said MRMC is “interested only in acquiring all of the outstanding common units of MMLP and have no interest in selling our interests in MMLP or the general partner or in pursuing any other strategic alternative involving MMLP or the general partner.”
“MRMC remains in active discussions with the GP’s conflicts committee, created by its board of directors,” she said.
Nut Tree and Caspian maintain that in light of their increased offer, they should be provided the opportunity to meet directly with the conflicts committee regarding to structure a transaction, the firms said.
Nut Tree and Caspian decisions to increase their offer is based on their own financial analysis of publicly available information regarding MMLP, its recent results, and current peer valuations, the firms said.
“We are disappointed that despite our repeated requests, the Conflicts Committee has refused to meet with us directly, offering up only a meeting with its financial advisor,” executives said in the press release.
“Nevertheless, we remain committed to constructive engagement with the Conflicts Committee to obtain its support and reach a negotiated, definitive agreement to acquire,” MMLP, Nut Tree and Caspian said.
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