Regency Energy Partners LP (NYSE:RGP) Investor Files Lawsuit Against Acquisition By Energy Transfer Partners

If you purchased units of Regency Energy Partners LP (NYSE:RGP) prior to January 26, 2015, and currently hold any of those NYSE:RGP units, you have certain options and you should contact the Shareholders Foundation, Inc.

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Company Name(s): 
Regency Energy Partners
Case Name: 
Regency Energy Partners Deal Case 02/03/2015
Case Status: 
Lawsuit Filed
Affected Securities
NYSE: RGP
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
02/02/2015
Summary: 

February 03, 2015 (Shareholders Foundation) - An investor, who currently holds units of Regency Energy Partners LP (NYSE:RGP), filed a lawsuit in effort to stop the proposed takeover of Regency Energy Partners LP by Energy Transfer Partners, L.P. for a value of $26.89 per NYSE:RGP unit.

The plaintiff alleges that the defendants breached their fiduciary duties owed to NYSE:RGP stockholders by agreeing to sell Regency Energy Partners LP too cheaply via an unfair process to Energy Transfer Partners, L.P..

On January 26, 2015, Energy Transfer Partners, L.P. and Regency Energy Partners LP announced they have entered into a definitive merger agreement. Under the terms of the merger agreement, the unitholders of Regency Energy Partners LP (NYSE:RGP) will receive 0.4066 Energy Transfer Partners, L.P.(NYSE ETP) common units and a cash payment of $0.32 for each common unit of Regency Energy Partners LP (NYSE:RGP), implying an all-in price for Regency Energy Partners LP common units of $26.89 per unit based on Energy Partners LP’s closing price on January 23, 2015.

However, the plaintiff claims that given Regency Energy Partners’ recent strong performance as well as its future growth prospects, the proposed consideration unitholders will receive is grossly inadequate and undervalues Regency Energy Partners LP. Indeed, at least one analyst has set the high target price for NYSE RGP units at $34.00 and NYSE RGP units traded as recently as September 2014 as high as $33.11.

In addition, the plaintiff claims that the process is also unfair to NYSE:RGP unitholders. The plaintiff alleges that the defendants have exacerbated their breaches of fiduciary duty by agreeing to lock up the Merger with deal protection devices, such as a strict no-solicitation provision, a matching rights provision, and a $450 million termination fee provision, that preclude other bidders from making a successful competing offer for Regency Energy Partners LP.

Regency Energy Partners LP reported that its annual Total Revenue rose from over $1.22 billion in 2010 to over $2.52 billion in 2013. Units of Regency Energy Partners LP (NYSE:RGP) traded as high as $33.11 per share in September 2014.