425: ISS and Glass Lewis Recommend EnLink Unitholders Approve ONEOK Acquisition

Leading proxy advisory firms ISS and Glass Lewis have recommended that EnLink unitholders vote in favor of the pending acquisition by ONEOK.

Summary

• Institutional Shareholder Services (ISS) and Glass Lewis & Co. have both recommended that EnLink Midstream unitholders vote in favor of the proposed acquisition by ONEOK.
• The special meeting for EnLink unitholders to vote on the acquisition is scheduled for January 30, 2025, and will be held virtually.
• The EnLink Board of Directors and its Conflicts Committee have also unanimously recommended that unitholders vote in favor of the acquisition.
• The acquisition requires approval from a majority of outstanding EnLink common units, including those owned by ONEOK, and is subject to other customary closing conditions.
• No vote is required from ONEOK shareholders to complete the transaction.
• The transaction is expected to close soon after the special meeting, pending the satisfaction or waiver of all closing conditions.

Sentiment

Score: 8

Explanation: The document conveys a positive sentiment due to the recommendations from ISS and Glass Lewis, and the unanimous support from the EnLink board. The risks are standard for a merger of this type.

Positives

• The recommendation from both ISS and Glass Lewis provides strong support for the acquisition.
• Unanimous support from the EnLink Board of Directors and Conflicts Committee indicates a positive outlook for the deal.
• The expected closing of the transaction soon after the special meeting suggests a smooth process.

Risks

• There is a risk that ONEOK may not successfully integrate EnLink's business.
• Cost savings, synergies, and growth from the transaction may not be fully realized or may take longer than expected.
• The credit ratings following the transaction may differ from what ONEOK expects.
• A condition to closing may not be satisfied, or the merger agreement may be terminated.
• EnLink unitholders may not approve the proposed transaction.
• There is a risk of adverse reactions or changes to business or employee relationships.
• Changes in ONEOK's capital structure could negatively impact the market value of its securities.
• The ability to retain customers and key personnel is a risk.
• The transaction could distract management teams or cause substantial costs.
• Economic downturns and commodity price declines pose risks.
• Changes in governmental regulations could impact the transaction.

Future Outlook

The transaction is expected to close soon after the special meeting, subject to the satisfaction or waiver of all other closing conditions.

Management Comments

• The EnLink Board of Directors and the Conflicts Committee of the EnLink Board of Directors unanimously recommend that unitholders vote FOR all proposals provided in detail in the definitive proxy statement related to the Special Meeting.

Industry Context

This acquisition is part of the ongoing consolidation trend in the midstream energy sector, where companies are seeking to expand their infrastructure and market reach.

Comparison to Industry Standards

• The recommendation by ISS and Glass Lewis is a standard practice in mergers and acquisitions, providing independent analysis to shareholders.
• Similar acquisitions in the midstream sector have seen varying levels of shareholder support, making the proxy advisory firms' recommendations crucial.
• The timeline for the special meeting and expected closing is typical for transactions of this nature.

Stakeholder Impact

• Shareholders are being asked to vote on the acquisition, which will impact their investment.
• Employees of both companies may experience changes due to the integration.
• Customers and suppliers may see changes in their relationships with the combined entity.

Next Steps

• EnLink unitholders will vote on the proposed acquisition at the special meeting on January 30, 2025.
• The transaction is expected to close soon after the special meeting, pending the satisfaction of closing conditions.

Key Dates

Keywords

ONEOK, EnLink Midstream, acquisition, merger, proxy advisory firms, ISS, Glass Lewis, unitholders, special meeting, midstream