US midstream company Tallgrass Energy (TGE) has accepted a sweetened takeover offer of $22.45 per share from Blackstone Infrastructure Partners and other investors.

In this connection, the Kansas-based pipeline operator has signed a definitive merger agreement with affiliates of Blackstone and affiliates of Spanish energy company Enagas, Singaporean sovereign wealth fund GIC, South Korean public pension fund NPS, and British pension fund Universities Superannuation Scheme (USS).

Under the agreement the Blackstone-led group will acquire the remaining stake of about 56% in the US midstream company.

The latest all cash-deal values Tallgrass Energy at nearly $6.3bn, reported Reuters.

Enagas revealed its part of the investment in the US pipeline company to be $836m.

Established in 2012, Tallgrass Energy is focused on transportation of crude oil and natural gas from the Rocky Mountains, Appalachian, and Upper Midwest regions in the US. The midstream energy infrastructure firm operates more than 13,357km of natural gas pipeline, more than 1,287km of crude pipeline, along with water pipeline of more than 482km.

Background of the takeover offer to Tallgrass Energy

The earlier offer from Blackstone and other investors to the midstream company was $19.5 per share, which was made in August 2019. Following the “take private” proposal, the pipeline company formed a conflicts committee to evaluate the proposal.

Subsequently, the offer was sweetened by the investors to $22.45 per share.

Prior to the “take private” proposal, the Blackstone-led group had signed a deal earlier this year to acquire a stake of around 44% in the pipeline company for about $3.3bn. The transaction was closed last month.

The midstream company stated: “The Conflicts Committee of the Board of Directors of Tallgrass Energy GP, LLC, TGE’s General Partner (“TGE GP”), after consultation with its independent legal and financial advisors, unanimously approved the transaction and determined it to be in the best interests of TGE and its public shareholders.”

The Blackstone-led investor group is expected to finance the acquisition with nearly $3bn of equity, and the remaining amount through debt.

Subject to shareholders’ approval and satisfaction of customary conditions, the transaction is likely to be closed in the second quarter of 2020.