Energy Transfer to bid for Magnum Hunter’s stake in Eureka gas pipeline
By MATTHEW MONKS
Bloomberg
Energy Transfer is bidding for Magnum Hunter Resources Corp.’s stake in the Eureka Hunter Pipeline, people with knowledge of the matter said.
The roughly 46% stake could be valued at as much as $600 million, Magnum Hunter has said. Energy Transfer has been pursuing Magnum Hunter’s stake in Eureka while also chasing Williams Cos.
Magnum Hunter began working with Bank of Montreal to auction off its stake in Eureka after Energy Transfer made an unsolicited offer for the assets earlier this year. Magnum Hunter has since reached out to Crestwood Midstream Partners and Summit Midstream Partners to gauge their interest in Eureka, said the people familiar with the matter, who asked not to be identified because the information is private.
Representatives for Magnum Hunter, Bank of Montreal and Energy Transfer declined to comment, while representatives for Crestwood and Summit didn’t return calls seeking comment.
Magnum Hunter, based in Houston, jumped as much as 15% in New York trading. It’s among several exploration companies that have been selling off pipelines to pay down debt and cover drilling costs. It announced plans to sell the Eureka stake in June and has told investors it expects to raise $460 million to $600 million from the deal.
Morgan Stanley’s infrastructure arm owns the rest of Eureka, which carries natural gas between Ohio and West Virginia, according to Magnum Hunter’s annual report.
Energy Transfer made an unsolicited $48 billion offer in June for Williams. That bid spurred the Tulsa, Oklahoma-based Williams to conduct a strategic review to determine whether it should sell itself or move forward with a restructuring plan. Under the restructuring, Williams would take full control of an operating unit while shedding its status as a partnership entitled to special tax breaks.
Last month, Energy Transfer signed a confidentiality agreement to participate in an auction for Williams.
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