Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
So what: In the proposed deal, each share of QR Energy would get 0.9856 shares of BBEP when the deal closes, representing a 19% premium to last night's closing prices. The acquisition was approved unanimously by the boards of directors of both companies.
Now what: The combined companies would be the largest oil-weighted upstream MLP in the country with a $7.8 billion valuation and 57,300 barrels of oil equivalent per day in production. Management alluded to cost savings as a result of the merger but fell short of saying exactly how much they expected to save. If you're a QR Energy shareholder I don't see much downside in holding on today. The stock hasn't gotten close to the eventual buyout price so there is upside left and the downside risk is if a deal falls through the stock will go down to around yesterday's closing price. It's a risk worth taking given the upside.
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Travis Hoium has no position in any stocks mentioned. The Motley Fool recommends BreitBurn Energy Partners. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.