Southcross Energy Partners LP (NYSE:SXE) Investor Lawsuit Against Acquisition By American Midstream Partners, LP

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Company Name(s): 
Southcross Energy Partners
Case Name: 
Southcross Energy Partners Deal Case 01/31/2018
Case Status: 
Lawsuit Filed
Affected Securities

An investor, who currently holds units of Southcross Energy Partners LP (NYSE:SXE), filed a lawsuit in effort to halt the proposed takeover of Southcross Energy Partners LP by American Midstream Partners, LP.

The plaintiff alleges that the defendants breached their fiduciary duties owed to NYSE:SXE stockholders by agreeing to sell Southcross Energy Partners LP cheaply via an unfair process.

On November 01, 2017, Southcross Energy Partners, L.P. (NYSE:SXE) announced that it has signed an agreement with American Midstream Partners, LP (NYSE:AMID) whereby American Midstream Partners, LP has proposed to merge Southcross Energy Partners LP (NYSE:SXE into a wholly owned subsidiary of American Midstream Partners, LP and that Southcross Holdings, LP (collectively, withSouthcross Energy Partners LP referred to as “Southcross”) has entered into a separate agreement with American Midstream Partners, LP whereby American Midstream Partners, LP will acquire certain assets of Southcross Holdings. The two separate transactions are valued in the aggregate at approximately $815 million, including the repayment of net debt. Under the terms of the proposed transaction public unitholders of Southcross Energy Partners LP (NYSE:SXE) will receive 0.160 American Midstream Partners, LP (NYSE:AMID) common units for each SXE common unit in a unit-for-unit merger. Based on a closing price of $13.55 per NYSE:AMID unit on October 31, 2017, NYSE:SXE untiholders will receive a value of approximately $2.17 per NYSE:SXE unit.

However, plaintiff claims that the proposed consideration NYSE:SXE unitholders will receive is grossly inadequate and undervalues Southcross Energy Partners LP. Indeed, at least one analyst has set the high target price for NYSE:SXE units at $2.75 per unit, the investigation concerns whether the offer is unfair to NYSE:SXE unitholders.In addition, the plaintiff alleges that the process is also unfair to NYSE:SXE unitholders.