Spectra Energy to acquire Spectra Energy Partners common units

Spectra Energy Corp. (NYSE: SE) and Spectra Energy Partners LP (NYSE: SEP) have agreed that Spectra Energy Corp. will acquire 9.1 million common units representing limited partner interests in Spectra Energy Partners at a price of $45.96 per unit in a private placement.

In addition, Spectra Energy Corp. will purchase up to an additional 1.4 million common units in the event that additional shares of its common stock are issued pursuant to the 25-day option granted to the underwriter in Spectra Energy Corp.'s public offering of common stock. Spectra Energy Corp. is the parent company of the general partner of Spectra Energy Partners.

When the initial private placement is complete, Spectra Energy Partners will have approximately 296 million common units outstanding. The Spectra Energy Corp. ownership interest in Spectra Energy Partners after this transaction will be 78%.

This transaction is being financed with the Spectra Energy common equity issuance announced on April 4. On that day, Spectra Energy Corp. announced that its public offering of 14 million shares of its common stock was priced at $30 per share to the public. Barclays Capital Inc. is acting as the sole underwriter for the offering. The company expects the delivery of the shares to occur on April 8. In addition, Barclays Capital Inc. has a 25-day option to purchase up to 2.1 million additional shares of the company's common stock.

Assuming no exercise of the option to purchase additional shares, Spectra Energy expects to receive gross proceeds from the offering of approximately $420 million (before the underwriting discount and other estimated offering expenses payable by the company). Spectra Energy expects to use the net proceeds from this offering to purchase additional common units from Spectra Energy Partners in a private placement. Following that transaction, Spectra Energy, which is the parent company of the general partner of Spectra Energy Partners, will hold a 78% ownership interest in Spectra Energy Partners.

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