Shares of MPLX LP (MPLX) Take a Dive After Merger with MarkWest


MPLX LP (NYSE:MPLX) has tumbled a bit today after an announcement that they would be merging with Markwest Energy Partners (MWE). The transaction is expected to be finalized on Friday (December 4) and it was approved by an 80% vote in favor of the move, although investors seemingly remain unsure.

“We are pleased the overwhelming majority of MarkWest unitholders voting supported the combination and we look forward to delivering on the significant opportunities in front of the combined partnership,” said Gary R. Heminger, MPLX chairman and chief executive officer. “This combination creates a large-cap diversified midstream partnership with an extraordinary growth profile, underpinned by MarkWest’s large organic growth backlog and MPC’s large inventory of MLP-eligible assets.”

This move makes MarkWest a subsidiary own solely by MPLX, and expectations for the entity are high. The deal means that MarkWest unitholders will receive $6.20 per unit.

The stock is down 13.32% or $5.72 after the news, hitting $37.22 per share. About 3.00M shares traded hands or 435.56% up from the average. MPLX has declined 43.76% since April 28, 2015 and is downtrending. It has underperformed by 42.87% the S&P500.

The institutional sentiment increased to 1.23 in Q2 2015. Its up 0.25, from 0.98 in 2015Q1. The ratio increased, as 13 funds sold all MPLX LP shares owned while 31 reduced positions. 15 funds bought stakes while 39 increased positions. They now own 22.05 million shares or 6.08% more from 20.79 million shares in 2015Q1.

C V Starr & Co Inc holds 7.95% of its portfolio in MPLX LP for 30,000 shares. Samson Capital Management Llc owns 134,604 shares or 5.22% of their US portfolio. Moreover, Heronetta Management L.P. has 3.56% invested in the company for 107,430 shares. The Massachusetts-based Nbw Capital Llc has invested 2.77% in the stock. Tortoise Capital Advisors L.L.C., a Kansas-based fund reported 5.83 million shares.

Since September 14, 2015, the stock had 1 buying transaction, and 0 insider sales for $182,680 net activity. Wilson C. Richard bought 4,000 shares worth $182,680.

MPLX LP is a fee-based master limited partnership formed by Marathon Petroleum Corporation (MPC) to own, operate, develop and acquire pipelines and other midstream assets related to the transportation and storage of crude oil, refined products and other hydrocarbon products. The company has a market cap of $2.92 billion. The Company’s assets include interest in a network of common carrier crude oil and product pipeline systems and storage assets in the Midwest and Gulf Coast regions of the United States. It has 20.38 P/E ratio. It has interest in a butane cavern in Neal, West Virginia with one million barrels of natural gas liquids storage capacity.