Tesoro Logistics to Buy Remaining Stake of QEP Midstream

Energy logistics company Tesoro Logistics LP, a master limited partnership created by refinery operator Tesoro Corp., has agreed to buy the remaining stake of QEP Midstream Partners LP in an exchange of common units.

In a $2.5 billion deal completed in December, Tesoro Logistics bought pipeline and gas-processing company QEP Field Services LLC, including its stake in QEP Midstream.

Tesoro Logistics, which now owns about 55.8% of QEP Midstream, said the merger will provide a more simplified business structure.

The deal for the remaining units is valued at $17.09 each. QEP Midstream units were up 3.8% to $16.34 in after-hours trading.

QEP Midstream had 26.7 million common units, 26.7 million subordinated units and one million general partner units outstanding as of March 2.

QEP Midstream disclosed in a December filing that Tesoro Logistics made a nonbinding merger proposal. The companies said the deal announced Monday provides an 8.5% premium to the exchange ratio of the original proposal.

Tesoro Corp. formed Tesoro Logistics in 2011. Since then, other refiners, including Phillips 66 and Valero Energy Corp., have followed suit and launched MLPs of their own. MLPs are popular with investors because of their high and dependable payouts.

Write to Josh Beckerman at [e-mail]

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