In a significant move for the energy sector, Equitrans Midstream Corp (NYSE:ETRN) has completed its merger with EQT Corporation (NYSE:EQT), marking a major shift in the company's structure and leadership. As of today, Equitrans Midstream Corp has become a wholly owned subsidiary of EQT (ST:EQTAB), with the newly formed entity named The Midstream Company LLC.
The merger, first announced on March 10, 2024, was finalized today, resulting in the conversion of Equitrans common stock into the right to receive 0.3504 of a share of EQT common stock for each Equitrans share held. Additionally, prior to the merger's completion, Equitrans redeemed all outstanding shares of its Series A Perpetual Convertible Preferred Shares at a price of $22.83 per share.
In conjunction with the merger, Equitrans has terminated its Third Amended and Restated Credit Agreement with EQM Midstream Partners, L.P., settling all outstanding obligations. Furthermore, the New York Stock Exchange (NYSE) has been requested to delist Equitrans common stock, which has ceased trading as of today.
The transaction has brought about material modifications to the rights of security holders and a change in control of the registrant, with EQT Corporation now overseeing the combined entity. The limited liability company agreement and certificate of formation of The Midstream Company LLC have been amended to reflect these changes.
Equitrans Midstream Corporation, now operating under the new name, will file a Form 15 with the SEC to suspend its reporting obligations under Sections 13(a) and 15(d) of the Exchange Act.
In other recent news, Equitrans Midstream Corporation has issued supplemental disclosures concerning its ongoing merger with EQT Corporation. This move is aimed at addressing shareholder lawsuits alleging the omission or misrepresentation of material information in the Proxy Statement/Prospectus related to the merger. Despite Equitrans maintaining the allegations are without merit, the company has chosen to provide additional details to prevent any delay in the merger's completion.
The disclosures include financial multiples and analyses used by financial advisors Barclays Capital Inc. and Citigroup Global Markets Inc., during the merger evaluation process. These details give insight into the valuation metrics and assumptions used in various financial analyses. The company also clarified the terms of nondisclosure agreements with various parties and the board's unanimous recommendation for shareholders to vote in favor of the merger proposals.
The merger, pending approval from shareholders and regulatory bodies, will result in Equitrans becoming an indirect wholly owned subsidiary of EQT. The transaction is structured as a two-step process, with Equitrans first merging into an EQT subsidiary, followed by a second merger into another EQT subsidiary. These recent developments are intended to address shareholder concerns and provide increased transparency into the merger process.
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