Martin Midstream Partners L.P. (MMLP) recently announced that the independent proxy advisory firm Institutional Shareholder Services Inc. (ISS) has recommended that MMLP unitholders vote in favor of the proposed transaction with Martin Resource Management Corporation (MRMC). This recommendation comes ahead of MMLP’s Special Meeting of Unitholders, scheduled for December 30, 2024, and reflects ISS’s evaluation of the transaction as a strategic decision offering significant value to stakeholders.
ISS Endorsement and Analysis
In its report dated December 16, 2024, ISS outlined the merits of the transaction, emphasizing the following points:
- Certainty and Liquidity: ISS noted that the transaction delivers immediate liquidity and value certainty, addressing inherent uncertainties in MMLP’s future plans as a micro-cap company with limited trading liquidity.
- Premium Valuation: The proposed transaction provides a meaningful premium compared to MMLP’s recent trading history. ISS highlighted that the offer represents a valuation not seen for over two years, positioning it as an optimal opportunity for unitholders.
- Negotiation Success: The report acknowledged the efforts of the Conflicts Committee in negotiating a higher final price, describing it as the best possible offer from MRMC.
- Risk Mitigation: ISS underscored that the transaction mitigates downside risks for unitholders, particularly in the case of non-approval, considering the company’s outperformance relative to broader market conditions.
MMLP’s Response
The Conflicts Committee and the General Partner’s Board of Directors (GP Board) unanimously support the ISS recommendation. They reaffirmed that the transaction maximizes value for MMLP’s unitholders, including those unaffiliated with management. MMLP emphasized that the deal delivers a significant cash premium, immediate liquidity, and certainty, validating the committee’s extensive review process.
Unitholder Voting Guidelines
MMLP urged unitholders to follow ISS’s recommendation by voting in favor of the proposal using the WHITE proxy card or WHITE voting instruction form. The company highlighted the importance of discarding any gold proxy cards from Nut Tree Capital Management L.P. and Caspian Capital L.P., encouraging unitholders who had inadvertently voted with the gold card to re-vote using the WHITE proxy card.
For further voting assistance, unitholders can contact MMLP’s proxy solicitor, Innisfree M&A Incorporated, through toll-free or international contact numbers.
Legal and Financial Advisors
To ensure a thorough review, the Conflicts Committee retained Munsch Hardt Kopf & Harr, P.C., Potter Anderson & Corroon LLP, and Houlihan Lokey, Inc., as advisors. MRMC engaged Baker Botts L.L.P. and Wells Fargo Securities, LLC, as their legal and financial advisors.
About MMLP and MRMC
MMLP, based in Kilgore, Texas, operates across diverse business lines focused on petroleum products, chemicals, sulfur-based products, and specialty lubricants. The partnership’s core operations support industries primarily in the Gulf Coast region. On the other hand, MRMC specializes in marketing and distributing hydrocarbon and related by-products, including asphalt, natural gas liquids, and base oils, through its subsidiaries.
