ONEOK To Buy Remaining Stake In ONEOK Partners In $17.2 Bln Deal - Quick Facts

(RTTNews) - ONEOK, Inc. (OKE) and ONEOK Partners, L.P. (OKS) said that ONEOK has agreed to acquire the remaining public stake in ONEOK Partners in a deal valued at $17.2 billion.

Under the definitive agreement, ONEOK will acquire all of the outstanding common units of ONEOK Partners it does not already own for $9.3 billion in ONEOK common stock.

Under the terms of the merger agreement, ONEOK will acquire all of the 171.5 million outstanding units of ONEOK Partners that it does not already own at a fixed exchange ratio of 0.985 ONEOK shares for each public unit of ONEOK Partners. This represents a 22.4 percent premium to the ONEOK Partners closing price on Jan. 27, 2017.

ONEOK Partners units will no longer be publicly traded. In aggregate, ONEOK will issue 168.9 million shares in connection with the proposed transaction, representing about 44.5 percent of the total shares outstanding of the pro forma combined entity.

The transaction is expected to be completed in the second quarter of 2017. As a result of the transaction, ONEOK's annual DCF is expected to approximately double.

Consequently, the management intends to recommend to the ONEOK board of directors a 21 percent increase in the first quarterly dividend following the completion of the transaction and expects a 9 percent to 11 percent annual dividend growth rate through 2021.

Upon completion of the transaction, ONEOK does not expect to pay cash income taxes through at least 2021.

In a separate announcement, ONEOK forecast net income for fiscal 2017 in a range of $575 million to $755 million and adjusted EBITDA of $1.87 billion to $2.13 billion.