Targa Resources To Buy Targa Resources Partners; Q3 Results Miss View

(RTTNews) - Targa Resources Corp. or TRC (TRGP) has agreed to acquire all of the outstanding common units of Targa Resources Partners LP (NGLS) not already owned by TRC in an all stock-for-unit transaction at a ratio of 0.62 TRC common shares per common unit of Targa Resources Partners, the two companies said Tuesday.

The transaction is expected to close in the first quarter of 2016 and be immediately accretive to TRC shareholders. Following completion of the transaction, all of the outstanding common units of TRP will be owned by TRC and will no longer be publicly traded.

Following this transaction, TRC expects dividend growth of 15 percent for 2016 and greater than 10 percent compound annual dividend growth through 2018.

Targa Resources Partners LP and Targa Resources Corp. also reported third-quarter financial results. The results for the both the companies missed analysts' estimates.

Targa Resources Corp. reported that third-quarter net income to shareholders declined to $12.7 million or $0.23 per share from $30.7 million or $0.73 per share in the prior-year quarter.

On average, ten analysts polled by Thomson Reuters expected the company to report profit per share of $0.58 for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter declined to $1.63 billion from $2.29 billion last year. Analysts had a consensus revenue estimate of $1.82 billion for the quarter.

Targa Resources Partners reported that third-quarter net income to company fell to $48.5 million from $128.3 million a year ago. Net income per limited partner unit was $0.02, compared to $0.78 in the year-ago quarter.

Analysts expected the company to report earnings of $0.10 per share for the quarter.

Revenues for the quarter declined to $1.63 billion from $2.29 billion in the same quarter last year. Analysts expected revenue of $1.76 billion for the quarter.