OGE Offer for Enable Midstream Stake is Rejected by CenterPoint

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Houston-based CenterPoint Energy has rejected an offer for its stake in Enable Midstream Partners from its partner, OGE Energy, according to an Argus news report published on September 29.

“There is no material agreement to report at this time,” said William D. “Bill” Rogers, CenterPoint’s chief financial officer and executive vice president. CenterPoint’s 30-day period to consider OGE’s offer under their partnership agreement expired September 16 without a deal. Rogers did not provide further comment on the proposed deal.

CenterPoint owns a 50% general partner interest and a 55% limited partner interest in Enable Midstream.

In July, CenterPoint notified OGE that it would solicit offers for its interest in Enable which was formed by CenterPoint, OGE and ArcLight Capital Partners in 2013.

OK Energy Today reported on August 21 that OGE exercised its right of first offer to acquire CenterPoint’s interest in Enable Midstream. OGE’s offer included a third party that would become the owner of CenterPoint’s stake in Enable Midstream, leaving OGE’s Enable Midstream ownership interest unchanged. OGE did not identify the third party or disclose any details of the offer at that time.

Tudor Pickering Holt investment bank analysts expect that CenterPoint will retain its stake in Enable Midstream “unless it is able to merge it into another midstream entity” to avoid a $1.3 billion tax liability.

Earlier this year, Scott Prochazka, CenterPoint’s president, said it was the “right time to explore options for unlocking the value of our strategic investment.”

CenterPoint has 120 days to find a suitable partner for the acquisition, which must include a 105% minimum price of OGE’s offer.