TGE - A Bitter Lesson in Poor Corporate Governance
"No SEC-registered asset manager could do to its investors what TGE management is doing to theirs." Simon Lack at SL Advisors, LLC wrote this in early September following The Blackstone Group's (NYSE: BX) purchase of Tallgrass Energy LP's (NYSE: TGE) general partner in March and subsequent offer to take it private on August 27th at $19.50 per share. No decision on the take-private offer has been publicly made yet; however, these events have sparked a lot of controversy and teach a valuable lesson about the importance of good corporate governance.
The Background
On March 11th, 2019, Blackstone acquired Tallgrass' general partner for $3.2 billion. This equated to a price of $26.25 per share (i.e. $22.43 for the limited partner interest and a $3.82 general partner premium).