Item 7.01 Regulation FD Disclosure.
On August 17, 2022, Phillips 66 (the "Company") posted to its website a
presentation summarizing two transactions it announced with respect to the
realignment of economic interests in DCP Midstream, LP ("DCP Midstream") and the
offer to purchase for cash all publicly held common units of DCP Midstream
pursuant to a merger with an indirect subsidiary of the Company with DCP
Midstream being the surviving entity, in each case as further described in Item
8.01 below. A copy of this presentation is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
The information in this Item 7.01 and Exhibit 99.1 attached hereto shall not be
deemed "filed" for purposes of the Securities Exchange Act of 1934 (the
"Exchange Act") or otherwise subject to the liabilities of that section, nor
shall it be deemed incorporated by reference in any filing under the Securities
Act of 1933 or the Exchange Act, regardless of any general incorporation
language in such filing.
Item 8.01 Other Events.
Joint Venture Merger
On August 17, 2022, the Company announced a realignment of its economic and
governance interests in DCP Midstream and Gray Oak Pipeline, LLC ("Gray Oak
Pipeline") through the merger of existing joint ventures (the "Merger") owned
with Enbridge (U.S.) Inc. ("Enbridge"). A copy of the news release issued by the
Company in connection with the realignment of its interests in DCP Midstream is
attached hereto as Exhibit 99.2 and incorporated herein by reference.
The Merger was accomplished pursuant to an Agreement and Plan of Merger entered
into as of August 17, 2022 (the "Merger Agreement"), by and among Enbridge,
Enbridge Holdings (Gray Oak) LLC, a Delaware limited liability company
("Enbridge GOH Holdings"), Spectra Energy DEFS Holding, LLC, a Delaware limited
liability company ("Spectra DEFS Holding"), Phillips 66 Company, a Delaware
corporation ("P66"), Phillips Gas Company LLC, a Delaware limited liability
company ("PGC"), DCP Midstream, LLC, a Delaware limited liability company ("DCP
LLC"), and Gray Oak Holdings LLC, a Delaware limited liability company ("GOH").
A copy of the Merger Agreement is attached hereto as Exhibit 99.3.
Immediately after the effective time of the Merger, PGC and Spectra DEFS
Holding, as the members of DCP Midstream, LLC entered into a Third Amended and
Restated Limited Liability Company Agreement of DCP Midstream, LLC effective on
August 17, 2022 (the "LLC Agreement"). A copy of the LLC Agreement is attached
hereto as Exhibit 99.4.
DCP Midstream Proposal
On August 17, 2022, the Company announced it submitted a non-binding proposal to
the board of directors of the general partner of DCP Midstream offering to
acquire all publicly held common units of DCP Midstream for cash. Subject to
negotiation and execution of a definitive agreement, the Company is proposing
consideration of $34.75 for each outstanding publicly held common unit of DCP
Midstream as part of a transaction that would be structured as a merger of DCP
Midstream with an indirect subsidiary of the Company with DCP Midstream as the
surviving entity. A copy of the news release issued by the Company in connection
with its offer to purchase all publicly held common units of DCP Midstream is
attached hereto as Exhibit 99.4 and incorporated herein by reference.
2
--------------------------------------------------------------------------------
Additional Information and Where You Can Find It
This report does not constitute a solicitation of any vote or approval with
respect to the proposed transaction. This report relates to a proposed business
combination between Phillips 66 and DCP Midstream, LP ("DCP Midstream"). In
connection with the proposed transaction, subject to further developments and if
a transaction is agreed, Phillips 66 and DCP Midstream expect to file an
information statement and other documents with the U.S. Securities and Exchange
Commission ("SEC"). INVESTORS AND SECURITYHOLDERS OF PHILLIPS 66 AND DCP
MIDSTREAM ARE ADVISED TO CAREFULLY READ ANY INFORMATION STATEMENT AND ANY OTHER
DOCUMENTS THAT HAVE BEEN FILED OR MAY BE FILED WITH THE SEC (INCLUDING ALL
AMENDMENTS AND SUPPLEMENTS THERETO) IF AND WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION, THE PARTIES TO
THE TRANSACTION AND THE RISKS ASSOCIATED WITH THE TRANSACTION. Any definitive
information statement, if and when available, will be sent to securityholders of
DCP Midstream relating to the proposed transaction. Investors and
securityholders may obtain a free copy of such documents and other relevant
documents (if and when available) filed by Phillips 66 or DCP Midstream with the
SEC from the SEC's website at www.sec.gov. Securityholders and other interested
parties will also be able to obtain, without charge, a copy of such documents
and other relevant documents (if and when available) from Phillips 66's website
at www.phillips66.com under the "Investors" tab under the heading "SEC Filings"
under the "Financial Information" sub-tab or from DCP Midstream's website at
www.dcpmidstream.com under the "Investors" tab and the "SEC Filings" sub-tab.
Participants in the Solicitation
Phillips 66, DCP Midstream and their respective directors, executive officers
and certain other members of management may be deemed to be participants in the
solicitation of consents in respect of the transaction. Information about these
persons is set forth in Phillips 66's proxy statement relating to its 2022
Annual Meeting of Stockholders, which was filed with the SEC on March 31, 2022;
Phillips 66's Annual Report on Form 10-K, which was filed with the SEC on
February 18, 2022; certain of Phillips 66's Current Reports on Form 8-K; DCP
Midstream's Annual Report on Form 10-K for the year ended December 31, 2021,
which was filed with the SEC on February 18, 2022, and subsequent statements of
changes in beneficial ownership on file with the SEC. Securityholders and
investors may obtain additional information regarding the interests of such
persons, which may be different than those of the respective companies'
securityholders generally, by reading the information statement and other
relevant documents regarding the transaction (if and when available), which may
be filed with the SEC.
CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS
This report certain forward-looking statements. Words and phrases such as
"anticipated," "estimated," "expected," "planned," "scheduled," "targeted,"
"believes," "continues," "intends," "will," "would," "objectives," "goals,"
"projects," "efforts," "strategies" and similar expressions are used to identify
such forward-looking statements. However, the absence of these words does not
mean that a statement is not forward-looking. Forward-looking statements
included in this report are based on management's expectations, estimates and
projections as of the date they are made.
3
--------------------------------------------------------------------------------
These statements are not guarantees of future performance and you should not
unduly rely on them as they involve certain risks, uncertainties and assumptions
that are difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expressed or forecast in such forward-looking
statements. Forward-looking statements contained in this report include, but are
not limited to, statements regarding the expected benefits of the potential
transaction to Phillips 66 and its shareholders and DCP Midstream and its
unitholders, and the anticipated consummation of the proposed transaction and
the timing thereof. Factors that could cause actual results or events to differ
materially from those described in the forward-looking statements include:
uncertainties as to the timing to consummate the potential transaction; the
effects of disruption to Phillips 66's or DCP Midstream's respective businesses;
the effect of this communication on the price of Phillips 66's shares or DCP
Midstream's common units; transaction costs; Phillips 66's ability to achieve
benefits from the proposed transaction; and the diversion of management's time
on transaction-related issues. Other factors that could cause actual results to
differ from those in forward-looking statements include: the effects of any
widespread public health crisis and its negative impact on commercial activity
and demand for refined petroleum products; the inability to timely obtain or
maintain permits necessary for capital projects; changes to worldwide government
policies relating to renewable fuels and greenhouse gas emissions that adversely
affect programs like the renewable fuel standards program, low carbon fuel
standards and tax credits for biofuels; fluctuations in NGL, crude oil, and
natural gas prices, and petrochemical and refining margins; unexpected changes
in costs for constructing, modifying or operating our facilities; unexpected
difficulties in manufacturing, refining or transporting our products; the level
and success of drilling and production volumes around our Midstream assets;
risks and uncertainties with respect to the actions of actual or potential
competitive suppliers and transporters of refined petroleum products, renewable
fuels or specialty products; lack of, or disruptions in, adequate and reliable
transportation for our NGL, crude oil, natural gas, and refined products;
potential liability from litigation or for remedial actions, including removal
and reclamation obligations under environmental regulations; failure to complete
construction of capital projects on time and within budget; the inability to
comply with governmental regulations or make capital expenditures to maintain
compliance; limited access to capital or significantly higher cost of capital
related to illiquidity or uncertainty in the domestic or international financial
markets; potential disruption of our operations due to accidents, weather
events, including as a result of climate change, terrorism or cyberattacks;
general domestic and international economic and political developments including
armed hostilities, expropriation of assets, and other political, economic or
diplomatic developments, including those caused by public health issues and
international monetary conditions and exchange controls; changes in governmental
policies relating to NGL, crude oil, natural gas, refined petroleum products, or
renewable fuels pricing, regulation or taxation, including exports; changes in
estimates or projections used to assess fair value of intangible assets,
goodwill and property and equipment and/or strategic decisions with respect to
our asset portfolio that cause impairment charges; investments required, or
reduced demand for products, as a result of environmental rules and regulations;
changes in tax, environmental and other laws and regulations (including
alternative energy mandates); political and societal concerns about climate
change that could result in changes to our business or increase expenditures,
including litigation-related expenses; the operation, financing and distribution
decisions of equity affiliates we do not control; and other economic, business,
competitive and/or regulatory factors affecting Phillips 66's businesses
generally as set forth in our filings with the Securities and Exchange
Commission. Phillips 66 is under no obligation (and expressly disclaims any such
obligation) to update or alter its forward-looking statements, whether as a
result of new information, future events or otherwise.
4
--------------------------------------------------------------------------------
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
99.1 Phillips 66 presentation summarizing the realignment of economic
interests in DCP Midstream, LP and the offer to purchase all publicly
held common units of DCP Midstream, LP
99.2 News release issued by Phillips 66 on August 17, 2022, related to
the realignment of economic interests in DCP Midstream, LP
99.3 Agreement and Plan of Merger entered into as of August 17, 2022, by
and among Enbridge (U.S.) Inc., a Delaware corporation, Enbridge
Holdings (Gray Oak) LLC, a Delaware limited liability company
("Enbridge GOH Holdings"), Spectra Energy DEFS Holding, LLC, a
Delaware limited liability company ("Spectra DEFS Holding"), Phillips
66 Company, a Delaware corporation ("P66"), Phillips Gas Company LLC,
a Delaware limited liability company ("PGC"), DCP Midstream, LLC, a
Delaware limited liability company ("DCP LLC"), and Gray Oak Holdings
LLC, a Delaware limited liability company ("GOH")
99.4 Third Amended and Restated Limited Liability Company Agreement of
DCP Midstream, LLC
99.5 News release issued by Phillips 66 on August 17, 2022, related to
the offer to purchase all publicly held common units of DCP Midstream,
LP
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
5
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses