Sunoco Shareholders: Cash is King

PHILADELPHIA -- Nearly three quarters of current Sunoco Inc. shareholders want all cash in exchange for their stock, as opposed to accepting common units of its acquirer, Energy Transfer Partners LP (ETP).

The two companies revealed preliminary results regarding which options shareholders elected in merger compensation. The duo of companies also announced the merger should be completed by this Friday.

Sunoco shareholders were offered three options in exchange for their Sunoco shares. The first option was to receive a combination of $25 per share in cash and 0.5245 of an ETP common unit. The second option was for shareholders to receive $50 in cash for each share of Sunoco owned. And the third option was to receive 1.049 ETP common units per Sunoco share owned.

More than 77 million Sunoco shareholders have thus far selected the second option of $50 in cash per share, which equals 73.92 percent of outstanding shares. In fact, so many Sunoco shareholders selected that option that it became "oversubscribed" as set forth in the shareholder agreement, and many will instead will have to receive the first option of a combination of cash and ETP units, according to a joint news release.

Only 2.7 million shareholders, or 2.61 percent of Sunoco shareholders, initially selected the cash and unit option.

Approximately 4.5 million Sunoco shareholders chose the third option of receiving only ETP units. That equals 4.25 percent of Sunoco's shareholders.

Holders of approximately 20 million Sunoco shares, 19.22 of outstanding shares, had not made an election when the votes were tabulated, which occurred on Oct. 1 at 5 p.m. New York time.

Shareholders who have not selected an option are required to do so by Oct. 4 at 5 p.m. New York time.

Energy Transfer Partners is a publically traded master limited partnership that owns and operates a diversified portfolio of energy assets.

Once the Sunoco-ETP merger is complete, it is unknown what ETP will do with Sunoco's network of approximately 4,900 gas stations and convenience stores in 23 states. Many industry experts have stated they expect ETP to sell the c-store and gas station network because it does not fit in with its core business.

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