Shell gains valuable M&A currency

摘要

Witness the progressively lower yield achieved on recent MLPs and one can't help but be impressed. Royal Dutch Shell affiliate shell midstream partners became the record holder by achieving a 2.83% annual payout on its US$920m IPO, besting the 3.33% threshold set by Dominion Midstream Partners on its IPO last month. The appeal to MLPs such as Shell Midstream is not current income but growth. That was highlighted by pricing after the close on Tuesday of the 40m units on its IPO at US$23, versus a US$19-$21 target on what was originally a 37.5m-unit offering. Barclays, Citigroup, Morgan Stanley and UBS had communicated that the deal was well oversubscribed and to expect above-range pricing. The outcome was not entirely unexpected.