Hedge funds Nut Tree Capital Management and Caspian Capital have upped their bid to acquire fuel storage and transportation company Martin Midstream Partners, according to a letter reviewed by Reuters on Monday.
The revised proposal offers Martin Midstream unitholders $4.50 per unit in cash, valuing the company at nearly $176m. This marks an increase from the previous $4 per unit bid made by the hedge funds on 11 July.
The sweetened offer is part of an ongoing effort by Nut Tree and Caspian to counter a competing bid from Martin Midstream’s largest shareholder, Martin Resource Management Corporation, which has proposed acquiring all common units it does not already own for $3.05 per unit in cash.
MRMC is led by Ruben S Martin III, whose father founded the business in 1951, establishing the legacy from which MRMC and Martin Midstream have evolved.
In their letter to the special board committee of Martin Midstream, which was formed to assess MRMC’s proposal, Nut Tree and Caspian expressed willingness to submit an even higher bid. They requested access to the company’s financial records and proposed entering a confidentiality agreement to facilitate the exchange of commercially sensitive information.
As of Monday, Martin Midstream’s common units were trading at $3.42, giving the company a market capitalisation of approximately $135m. Including debt, the total enterprise value is about $518m, according to LSEG data.
