The Chief Executive Officer of Magellan Midstream Partners, Aaron Milford, is calling on shareholders to vote in favor of the company’s $18.8 billion cash and stock sale to Oneok Inc. as the crucial vote approaches later this month.
In an interview with Seeking Alpha, Milford emphasized the importance of communicating with all retail holders and ensuring they understand the benefits of approving the transaction. He stated, “The benefits are just so obvious to us.”
Milford began his campaign to convince shareholders back in May when Oneok announced its plan to combine with Magellan Midstream. Despite facing opposition from Energy Income Partners, one of MMP’s largest holders, Milford maintained that the premium in the deal justifies the tax bill that unitholders will have to pay.
The transaction is expected to result in annual synergy savings of $200-$400 million, according to Milford. By combining a healthy crude oil and refined products business with natural gas liquids and natural gas, the newly formed company will have higher growth potential and more investment opportunities.
Regarding concerns about the tax implications, Milford argued that unit holders would eventually have to pay taxes if they sold their shares, regardless of the transaction. He emphasized that the tax-free deal provides a higher premium and greater upside for investors compared to selling their units separately.
The push by Magellan Midstream to secure shareholder approval for the sale to Oneok comes as the vote approaches on September 21. Milford expressed confidence in the deal and reiterated that the transaction’s terms have been thoroughly considered, resulting in the best outcome for unit holders.