UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrantþ
Filed by a Party other than the Registranto
Check the appropriate box:
o | | Preliminary Proxy Statement |
o | | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
o | | Definitive Proxy Statement |
þ | | Definitive Additional Materials |
o | | Soliciting Material Pursuant to §240.14a-12 |
Buckeye Partners, L.P.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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o | | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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| (3) | | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
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| (4) | | Proposed maximum aggregate value of transaction: |
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| (5) | | Total fee paid: |
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o | | Fee paid previously with preliminary materials. |
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Buckeye Partners, L.P.
Dear BPL Unitholder:
On June 11, 2010, we announced an agreement that would result in the merger of Buckeye Partners, L.P. (“BPL”) with the owner of our general partner, Buckeye GP Holdings L.P. (“BGH”). Under the terms of the proposed merger, BGH unitholders would receive 0.705 limited partner units of BPL for each limited partner unit of BGH owned. Although the audit committee of BPL unanimously approved the agreement,the merger requires the majority approval by you, the limited partners of BPL.
For several years, BPL and BGH have been focused on improving BPL’s competitive position by reducing its cost of equity capital. Other midstream MLPs, including Sunoco Logistics Partners L.P., NuStar Energy L.P., Magellan Midstream Partners, L.P. and MarkWest Energy Partners, L.P., have acted to reduce their cost of equity capital by repurchasing, capping, or eliminating the incentive distribution rights (“IDRs”) that they pay to their general partners. In addition, other MLPs have recently announced similar transactions that would eliminate IDRs. By eliminating the IDRs that BPL pays to BGH, BPL should become more competitive when pursuing acquisitions and able to finance organic growth projects less expensively, which in turn should enhance BPL’s long-term distribution growth prospects. A reduction of BPL’s cost of equity capital is, in our view, necessary for BPL to effectively compete for acquisitions in the future.
We believe the merger will result in substantial long-term benefits for BPL unitholders, including the following:
Strengthens Competitive Position
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• | Lowers BPL’s cost of equity capital by eliminating the IDRs paid by BPL to BGH |
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• | Enhances BPL’s ability to compete successfully for high-growth acquisition opportunities and expansion projects |
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• | Maintains BPL’s strong balance sheet and liquidity to further facilitate growth by completing the transaction with 100 percent equity consideration (merger viewed as credit positive by rating agencies) |
Enhances Distribution Growth Profile
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• | Increases the potential for accelerated distribution growth over the long term through the removal of the IDRs, while maintaining the company’s intention and pattern of quarterly distribution increases over the short term |
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• | Eliminates disproportionate allocation of distributable cash flows between the general partner and limited partners, resulting in 100% of distributions being paid to BPL unitholders |
Improves Ownership Profile
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• | Strengthens corporate governance by providing BPL unitholders with the right to elect seven of nine members of the Board of Directors, pending regulatory approval |
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• | Increases BPL’s public float, improving liquidity for LP units and expanding the pool of potential investors in BPL |
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• | Simplifies the ownership structure to a single publicly traded entity, BPL |
After the merger, BPL would own its general partner, which would continue to exist for management purposes only, with no economic interest in BPL’s business. The merger would not change BPL’s underlying business, and the existing management team would remain in place and continue to pursue its strategic objectives on behalf of unitholders.
We encourage you to review the accompanying proxy materials to make an informed decision on this important matter. Attached to this letter are a few selected questions and answers that may be useful to you in considering the merger transaction. If you have any questions concerning the merger proposal, please call our proxy solicitation agent, Morrow & Co., LLC, at(800) 573-4412 (banks and brokers call:(203) 658-9400).
YOUR VOTE ON THE MERGER PROPOSAL DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT IS VERY IMPORTANT. YOUR BROKER CANNOT VOTE FOR YOU WITHOUT YOUR INSTRUCTION. FAILURE TO VOTE WILL HAVE THE SAME EFFECT AS A VOTEAGAINST THE MERGER.
This merger is an important, positive transaction for the long-term growth of BPL. We appreciate your continued investment in BPL and confidence in the Buckeye management team.
Sincerely,
Forrest E. Wylie
Chairman of the Board and
Chief Executive Officer