Why Is Oneok (OKE) Stock Down 7% Today?

Advertisement

  • Oneok (OKE) stock is dropping on plans to acquire Magellan Midstream Partners (MMP).
  • The deal values MMP at $67.50 per share.
  • This brings the total value of the deal to $18.8 billion.
OKE Stock - Why Is Oneok (OKE) Stock Down 7% Today?

Source: Shutterstock

Oneok (NYSE:OKE) stock is falling on Monday after the company announced plans to acquire Magellan Midstream Partners (NYSE:MMP).

Oneok is using a mix of cash and stock to acquire all outstanding shares of MMP stock. The offer has it promising $25 in cash, as well as 0.6670 shares of OKE stock, for each share of MMP stock. This values shares of MMP stock at $67.50, which is a 22% premium from its closing price on Friday.

All-in-all, this has Oneok’s offer valuing Magellan Midstream Partners at $18.8 billion when including assumed debt. When the two energy companies combine, the merged result will have a total enterprise value of $60 billion.

Pierce H. Norton II, president and CEO of Oneok, said the following about the merger:

“The combination of ONEOK and Magellan will create a diversified North American midstream infrastructure company with predominately fee-based earnings, a strong balance sheet and significant financial flexibility focused on delivering essential energy products and services to our customers and continued strong returns to investors.”

What This Means for OKE Stock

OKE stock will continue to trade after the merger with MMP stock no longer being publicly listed. Also, Norton will remain the leader of the combined company. The deal is set to close in the third quarter of 2023, so long as investors and regulators approve the merger.

With today’s news comes heavy trading of OKE stock. As of this writing, more than 5 million shares of the stock have changed hands. For the record, its daily average trading volume is closer to 2.5 million shares.

OKE stock is down 6.7% as of Monday morning.

Investors looking for more of the most recent stock market news will want to stick around!

We have all of the hottest stock market news worth knowing about on Monday! A few examples include why shares of Exela Technologies (NASDAQ:XELA), MMP, and SoFi Technologies (NASDAQ:SOFI) stock are moving today. All of that news is available at the following links!

More Monday Stock Market News

On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2023/05/why-is-oneok-oke-stock-down-7-today/.

©2023 InvestorPlace Media, LLC