Cheniere Energy Inc. to rollup Cheniere Energy Holdings (CQH)

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Market Price (9/30/2016): $43.60/share; ST-Target: $44/share; NIV: $158/share

Cheniere Energy Inc. to rollup Cheniere Energy Holdings (CQH)

  • In a stock exchange transaction, Cheniere Energy Inc. (Cheniere) is proposing to buyback all of CQH
    • For each share of CQH, Cheniere is offering 0.5049 of Cheniere stock, which calculates to about a 3% premium as of the closing prices of Cheniere/CQH on September 29, 2016, and some 6% premium to the 30-day average trading price of both Cheniere/CQH as of September 29, 2016.
  • If this transaction is concluded then, based on our data and calculations, Cheniere would increase its economic ownership of CQH from 80.1% to 100.0%, which in turn would increase Cheniere’s economic interest in CQP to about 52% from some 42% currently. More importantly, this would increase Cheniere’s share of CQP distributions to about 32% from some 28% at present.
  • Although the timing is a bit of a surprise, it is no surprise that Cheniere is attempting to consolidate CQH, something that which we expected.

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