AmeriGas Partners, L.P. and AmeriGas Finance Corp. Commence Cash Tender Offer for up to $450,000,000 of the Outstanding Aggregate Principal Amount of their 5.500% Senior Notes due 2025.

Rhea-AI Summary

UGI has announced that its subsidiaries, AmeriGas Partners and AmeriGas Finance Corp., have initiated a cash tender offer to purchase up to $450 million of their 5.500% Senior Notes due 2025. The offer, set forth in the Offer to Purchase dated June 11, 2024, provides a purchase price of $1,005 per $1,000 principal amount of Notes tendered by June 25, 2024, with an early tender payment of $50. Notes tendered after this date but by July 11, 2024, will receive $955 per $1,000 principal amount. The offer includes accrued and unpaid interest until the settlement date and can be withdrawn before June 25, 2024. BNP Paribas Securities Corp. is acting as the Dealer Manager for this offer.

Positive

• UGI's subsidiaries offer a competitive incentive with early tender payments.
• The maximum tender amount of $450 million indicates strong liquidity.
• The tender offer provides an opportunity to reduce debt obligations.
• Engagement of BNP Paribas Securities Corp. as Dealer Manager shows professional oversight.

Negative

• The offer price for notes tendered after June 25 is lower, which may discourage late participation.
• The tender offer's success is contingent on certain conditions being met.
• The inability to withdraw notes after the Early Tender Deadline could deter some holders.
• No specific details on the source of funds for the tender offer are provided, causing potential financial uncertainty.

Insights

Financial Analyst

The announcement of AmeriGas Partners' cash tender offer for up to 450,000,000 of their 5.500% Senior Notes due 2025 is significant. Tender offers like this one are often used by companies to manage their debt more effectively. This can result in lower interest expenses, which can improve the overall financial health of the company. Here, the Offerors are providing an incentive for early tenders by offering $1,005 per $1,000 for Notes tendered by June 25, 2024, compared to $955 for those tendered after that date.

For investors, this action indicates that the company is proactive in managing its liabilities. However, it also suggests that the company is willing to pay a premium to retire these notes early, which might imply they expect future cash flows to be sufficient to cover this expense. There might be a concern regarding liquidity if the company is using available cash reserves for this tender offer.

Long-term investors should monitor how this impacts the company's balance sheet and cash flow. If successfully executed, this tender offer could improve the company’s debt ratios and potentially lead to better credit ratings.

Market Research Analyst

The tender offer for AmeriGas Partners' senior notes also sends a broader signal about market conditions and investor sentiment. By offering to buy back notes, the company appears to be taking advantage of current market stability to lock in their financial strategies. This could be seen as a vote of confidence in the overall economic environment, where AmeriGas Partners likely expects favorable conditions to continue.

From a market perspective, this move could be seen as a positive indicator of the company's commitment to maintaining a healthy debt structure. However, investors should also consider the potential risks associated with using cash reserves for such operations, especially in a volatile market environment. This action might limit the company's financial flexibility if market conditions worsen.

Retail investors should view this development as part of the company's broader strategy to optimize its capital structure. It’s essential to keep an eye on how these changes align with their investment goals and risk tolerance.

VALLEY FORGE, Pa.--(BUSINESS WIRE)-- UGI Corporation (NYSE: UGI) announced today that its subsidiaries, AmeriGas Partners, L.P. (“AmeriGas Partners”) and AmeriGas Finance Corp. (together with AmeriGas Partners, the “Offerors”), have commenced an offer to purchase for cash up to $450,000,000 of the outstanding aggregate principal amount of the Offerors’ 5.500% Senior Notes due 2025 (the “Notes”), upon terms and subject to the conditions set forth in the Offer to Purchase, dated June 11, 2024 (as may be amended or supplemented from time to time, the “Offer to Purchase”) (the “Offer”).

Notes validly tendered and not validly withdrawn at or prior to 5:00 p.m., New York City time, on June 25, 2024 (the “Early Tender Deadline”) will be eligible to receive a purchase price of $1,005 per $1,000 principal amount of Notes tendered, including an early tender payment of $50 per $1,000 principal amount of the Notes tendered. Notes validly tendered and not validly withdrawn after the Early Tender Deadline but at or prior to 5:00 p.m., New York City time, on July 11, 2024 (the “Expiration Time”) will be eligible to receive a purchase price of $955 per $1,000 principal amount of Notes tendered. Tendering holders will also receive accrued and unpaid interest from the last interest payment date to, but not including, the applicable settlement date.

Subject to certain exceptions, tendered Notes can only be withdrawn before 5:00 p.m., New York City time, on the Early Tender Deadline (the “Withdrawal Deadline”). Following the Withdrawal Deadline, holders who have tendered their Notes may not withdraw such Notes unless the Offerors are required to extend withdrawal rights under applicable law.

The Offerors expressly reserve the right, in their reasonable discretion, subject to applicable law, to terminate the tender offer at any time prior to the Expiration Time. The Offerors will not be required to purchase any of the Notes tendered unless certain conditions have been satisfied.

In connection with the Offer, the Offerors have retained BNP Paribas Securities Corp. as the Dealer Manager. Questions regarding the tender offer should be directed to BNP Paribas Securities Corp. by calling collect at (212) 841-3059 or toll free at (888) 210-4358. Requests for copies of the Offer to Purchase and related documents should be directed to D.F. King & Co., Inc., the Information Agent for the tender offer, at (800) 207-3159 (toll free) or 212-269-5550.

This announcement is not an offer to purchase or a solicitation of an offer to sell with respect to any Notes. Any offer to purchase the Notes will be made by means of an Offer to Purchase. No offer to purchase will be made in any jurisdiction in which such an offer to purchase would be unlawful.

Cautionary Statements:

This press release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, Section 27A of the Securities Act of 1933, as amended, and the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding the Offerors’ intention to purchase any Notes. Readers are cautioned not to place undue reliance on these forward-looking statements and any such forward-looking statements are qualified in their entirety by reference to the following cautionary statements. All forward-looking statements speak only as of the date of this press release and are based on current expectations and involve a number of assumptions, risks, and uncertainties that could cause the actual results to differ materially from such forward-looking statements. Readers are strongly encouraged to read the full cautionary statements contained in AmeriGas Partners’ most recent annual report and in UGI’s filings with the Securities and Exchange Commission, and in UGI’s and the Offerors’ other communications with investors. UGI and the Offerors disclaim any obligation to update or revise any forward-looking statements.

About AmeriGas Partners

AmeriGas Partners is the largest retail propane marketer in the United States, with approximately 940 million gallons of propane sold annually to 1.2 million customers in all 50 states from approximately 1,380 locations.

About UGI

UGI Corporation (NYSE: UGI) is a distributor and marketer of energy products and services in the US and Europe. UGI offers safe, reliable, affordable, and sustainable energy solutions to customers through its subsidiaries, which provide natural gas transmission and distribution, electric generation and distribution, midstream services, propane distribution, renewable natural gas generation, distribution and marketing, and energy marketing services.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240611384647/en/

INVESTOR RELATIONS

610-337-1000

Tameka Morris, ext. 6297

Arnab Mukherjee, ext. 7498

Source: UGI Corporation

FAQ

What is the cash tender offer announced by UGI's subsidiaries?

UGI's subsidiaries are offering to purchase up to $450 million of their 5.500% Senior Notes due 2025 for cash.

What is the early tender payment for the UGI cash tender offer?

The early tender payment is $50 per $1,000 principal amount of Notes tendered by June 25, 2024.

What is the final purchase price for Notes tendered by the early deadline?

The purchase price is $1,005 per $1,000 principal amount of Notes tendered by June 25, 2024.

When is the expiration time for the UGI cash tender offer?

The expiration time for the offer is 5:00 p.m., New York City time, on July 11, 2024.

Can Notes be withdrawn after the Early Tender Deadline?

No, Notes cannot be withdrawn after the Early Tender Deadline, unless required by applicable law.

What is the role of BNP Paribas Securities Corp. in the UGI tender offer?

BNP Paribas Securities Corp. is acting as the Dealer Manager for the tender offer.