Oaktree Funds To Discuss With Parent Of Retail Supplier Plans For Enhancing Shareholder Value; Disclose Holdings In Schedule 13D
April 8, 2020 Email This Story Copyright 2010-20 EnergyChoiceMatters.com
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Various Oaktree funds and related entities ("Reporting Persons") have filed a Schedule 13D with the SEC disclosing their position in Sprague Resources LP, as the Oaktree funds said that they would discuss with Sprague Resources LP (the "Partnership") the Partnership's plans to enhance shareholder value, including as they relate to the previously reported unsolicited non-binding proposal from Sprague Resources Holdings LLC ("Holdings"), pursuant to which Holdings would acquire all of the outstanding common units of Sprague Resources LP that Holdings and certain of its affiliates do not already own in exchange for $13.00 in cash per common unit, and any alternatives thereto
The Oaktree funds reported that, on March 30, 2020, March 31, 2020, and April 1, 2020, certain Oaktree funds purchased in open market transactions 1,375,000 common units of Sprague Resources LP, at prices ranging from $12.95 to $13.03, for a total consideration of $687,500 and cash on hand.
Per the SEC filing, the Reporting Persons may now be deemed the beneficial owner of 3,225,000 common units, which represents approximately 14.10% of the total outstanding common units.
The Oaktree funds said that the purpose of the transactions was as follows:
"The Reporting Persons acquired the common units reported herein for investment purposes. Depending upon market conditions and other factors that they may deem material, the Reporting Persons or their affiliates may seek to acquire securities of the Partnership or other financial instruments related to the Partnership or its securities (which may include rights or securities exercisable or convertible into securities of the Partnership) and/or sell or otherwise dispose of some or all of such Partnership securities or financial instruments from time to time, in each case, in open market or private transactions, block sales or otherwise.
"Specifically, the Reporting Persons intend to discuss with one or more of management, the Board of Directors of the general partner of the Partnership, affiliates of Sprague Resources Holdings LLC ('Holdings'), the owner of the general partner of the Partnership, and their respective advisors, the Partnership’s plans for enhancing shareholder value, including as it relates to the unsolicited non-binding proposal from Holdings dated March 25, 2020, pursuant to which Holdings would acquire all of the outstanding common units of the Partnership that Holdings and certain of its affiliates do not already own in exchange for $13.00 in cash per common unit (the 'Proposal'), and any alternatives thereto. In addition, the Reporting Persons may in the future formulate plans or proposals regarding the Partnership or its securities, including with respect to the Proposal or any potential strategic alternative thereto.
"Other than as described in this Schedule 13D, none of the Reporting Persons or, to their best knowledge, any Covered Persons have any current plans or proposals that would be related to or would result in any of the matters described in Items 4(a)-(j) of Schedule 13D; however, as part of its ongoing evaluation of this investment and investment alternatives, the Reporting Persons may consider such matters in the future and, subject to applicable law, may formulate a plan with respect to such matters, and, from time to time, the Reporting Persons may hold discussions with or make formal proposals to management or the Board of Directors of the Issuer, other shareholders of the Issuer or other third parties regarding such matters."
"As of the date hereof, each of the Reporting Persons may be deemed the beneficial owner of 3,225,000 common units, which represents approximately 14.10% of the total outstanding common units," the Reporting Persons said
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