Comprehensive support throughout mergers and acquisitions and other corporate transactions.Corporate Finance
Limited partners and general partners don’t always share interests in M&A transactions.
The concept of dilution to shareholders from equity offerings is not new. Most investors (and companies) prefer to ﬁnance acquisitions with debt, assuming that leverage remains within prudent levels. The same is true with MLPs but the dynamics of the general partners (GP) incentive distribution rights (IDRs) sometimes create a situation where the GP and limited partner (LP) unit holders have conﬂicting or perceived conﬂicting objectives.
This article highlights some of the complicating factors resulting from the MLP and IDR structure that need to be considered by conﬂicts committees when evaluating transactions. It also examines the implications of the current M&A market and commodity price environment with respect to these structures.
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