Robbins LLP: Acquisition of Columbia Pipeline Partners LP (CPPL) by Columbia Pipeline Group, Inc. (Private) May Not Be in Unitholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Columbia Pipeline Partners LP (the “Partnership”) (NYSE: CPPL) by Columbia Pipeline Group, Inc. (“Columbia”) (Private). On September 26, 2016, the Partnership announced the receipt of an offer pursuant to which Columbia will acquire the Partnership. Under the terms of the agreement, the Partnership unitholders will receive $15.75 in cash for each unit of the Partnership common units.
Is the Proposed Acquisition Best for the Partnership and Its Unitholders?
Robbins LLP’s investigation focuses on whether the board of directors at the Partnership is undertaking a fair process to obtain maximum value and adequately compensate its unitholders.
As an initial matter, the $15.75 merger consideration represents a premium of only 2.90% based on the Partnership’s closing price on September 23, 2016. This premium is significantly below the average one day premium of nearly 65.55% for comparable transactions within the past three years. Further, the $15.75 merger consideration is significantly below the target price of $23.00 set by an analyst at Credit Suisse on March 18, 2016; $22.00 set by an analyst at Jefferies on January 14, 2016; $20.00 set by an analyst at Scotia Howard Weil Inc. on December 15, 2015; $17.00 set by analysts at Barclays and JP Morgan on July 27, 2016 and May 26, 2016, respectively; and $16.00 set by an analyst at Morgan Stanley on August 3, 2016. In the last three years, the Partnership traded as high as $29.00 on March 3, 2015, and most recently traded above the merger consideration – at $16.02 – on August 2, 2016.
On August 2, 2016, the Partnership reported strong earnings results for its second quarter 2016. The Partnership reported net cash flows from operating activities of $177.2 million, representing a 17.2% increase over the prior year of $151.2 million. Adjusted EBITDA attributable was $24.7 million for the second quarter compared with $21.3 million in the prior-year period, a 16.0% increase.
In light of these facts, Robbins LLP is examining the Partnership’s board of directors’ decision to sell the company now rather than allow unitholders to continue to participate in the company’s continued success and future growth prospects.
The Partnership unitholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for unitholders and the disclosure of material information.
The Partnership unitholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.