(Bloomberg) -- Stonepeak Partners LP agreed to pay about $1.5 billion for liquefied natural gas tanker company Teekay LNG Partners amid shortage-driven price spikes for the fuel in Asia and Europe.
The investment firm will pay $17 per common unit of U.S.-listed Teekay, both companies said Monday in a statement, confirming deal talks reported earlier by Bloomberg News. The units rose 8.7% to $17.06 at 10:58 a.m. in New York.
LNG spot prices in Asia hit a record last week as competition with European buyers heats up ahead of peak demand during the winter season, with storage levels already at multi-year lows. Demand for the super-chilled fuel is also projected to rise strongly in coming years as countries cut their use of dirtier fossil fuels such as coal and oil.
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Teekay has interests in 47 LNG carriers and 21 mid-size LPG carriers, plus seven multi-gas carriers, according to the statement.
LNG tankers hauling gas to Asia are commanding about $70,500 dollars a day while ships heading for Europe are fetching $64,000, according to Spark Commodities, which takes assessments from shipbrokers.
Including debt, the deal is valued at about $6.2 billion. Morgan Stanley is Teekay's financial advisor and Squire Patton Boggs LLP and Perkins Coie LLP are its legal advisers. Houlihan Lokey Capital Inc. is financial adviser and Potter Anderson & Corroon LLP legal adviser to the conflicts committee of Teekay's general partner, Teekay GP. DNB Markets is financial adviser to Stonepeak and Simpson Thacher is its legal adviser.
| Teekay LNG Partners Fleet | |
|---|---|
| Percentage Ownership | LNG Tankers |
| 100% | 17 |
| 70% | 5 |
| 52% | 6 |
| 50% | 7 |
| 40% | 4 |
| 33% | 4 |
| 30% | 2 |
| 20% | 2 |
| Grand Total | 47 |
| Source: Teekay LNG Partners | |
©2021 Bloomberg L.P.
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