Majority Shareholder Submits Proposal To Acquire Parent Of Retail Supplier

March 27, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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Sprague Resources LP (Sprague') announced today that it received an unsolicited non-binding proposal from Sprague Resources Holdings LLC (Holdings') dated March 25, 2020, pursuant to which Holdings would acquire all of the outstanding common units of Sprague that Holdings and certain of its affiliates do not already own in exchange for $13.00 in cash per common unit.

Holdings and certain of its affiliates hold approximately 53.3% of the outstanding common units of Sprague as of March 26, 2020.

The $13.00 per common unit price of the proposal represents a premium of approximately 14% to its 10-day volume weighted average price prior to March 26, 2020, and a premium of approximately 7% to its 30-day volume weighted average price prior to March 26, 2020.

The board of directors of Sprague’s general partner will delegate the authority to evaluate and negotiate the proposal to its conflicts committee. The conflicts committee, which is composed of only independent directors of the board of directors of Sprague’s general partner, will consider the proposal pursuant to applicable procedures established in Sprague’s partnership agreement and will engage legal and financial advisors in connection with its consideration of the proposal. The proposal is non-binding and is subject to the negotiation and execution of a mutually acceptable merger agreement or other similar agreement which would set out all of the terms and conditions relevant to the proposed transaction. The proposal also would be subject to customary closing conditions, such as customary regulatory approvals.

Among other businesses, Sprague Resources LP markets natural gas to approximately 14,000 commercial and industrial customer locations primarily located in the Northeast and Mid-Atlantic United States. The company also brokers retail electricity

Sprague Resources Holdings LLC is a wholly-owned subsidiary of Axel Johnson. Axel Johnson is a wholly-owned subsidiary of Lexa. Lexa, through certain non-U.S. entities, is controlled by Ms. Johnson

Sprague Resources Holdings said in a communication to investors that, "Broadly speaking, we believe the MLP market continues to face a variety of structural headwinds and market challenges that we expect to continue, including a limited public equity buyer universe, recent regulatory changes that disproportionately affect MLPs, and muted tax advantages of MLPs relative to C-corps, leading to equity prices for midstream companies such as Sprague that in our view are unlikely to be supportive of future growth initiatives and/or high distribution pay-outs. We have already seen a number of MLPs significantly reduce their distributions, while also implementing capital expenditure curtailment plans. We believe our offer allows for Sprague’s public equity investors to realize all cash for their units at a premium to the market price in an illiquid stock that is constrained to grow and return historical levels of cash to unitholders in the future."

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