Refilling the (premium) MLP tanks

Over the past year, the best risk/reward investment I’ve been aware of have been in MLP take privates (well, aside from maybe TWTR, but man was that stressful!). We’ve successfully played three on the blog (SHLX, DCP, and PBFX); all resulted in solid returns (SHLX taken out for ~25% premium to initial bid; PBFX for ~32% premium, and DCP for a ~20% premium). More importantly, all of these were done with limited risk: I think the buyers got a spectacular deal for each of those assets, and once the “go private” process was started it seemed inevitable it would lead to a deal at a nice premium.

Today I present one more MLP take private deal. For reasons I’ll discuss, the risk here is probably a little higher than the previous recommendations… but with that added risk comes the potential for a much higher premium / topping bid.