Item 1.01
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Entry into a Material Definitive Agreement.
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Agreement and Plan of Merger
On June 18, 2018, Cheniere Energy, Inc. (Cheniere), a Delaware corporation, Columbia Acquisition Sub LLC (Merger Sub), a Delaware
limited liability company and a wholly-owned subsidiary of Cheniere, and Cheniere Energy Partners LP Holdings, LLC (CQH), a Delaware limited liability company, entered into an Agreement and Plan of Merger (the Merger
Agreement). Pursuant to the Merger Agreement, CQH will merge with and into Merger Sub (the Merger), with Merger Sub continuing as the surviving entity and a wholly-owned subsidiary of Cheniere.
Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Merger, each common share representing limited liability
company interests in CQH (each, a CQH Common Share) issued and outstanding immediately prior to the effective time of the Merger will be converted into, and become exchangeable for 0.4750 of a share of common stock, par value $0.003, of
Cheniere (Cheniere Common Stock).
The conflicts committee (the CQH Conflicts Committee) of the board of directors of CQH (the
CQH Board) has, acting in good faith, unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are fair and reasonable to, and in the best interest of, CQH and the holders
of CQH Common Shares, other than Cheniere and its affiliates, (ii) approved the Merger Agreement and the transactions contemplated thereby, including the Merger, and (iii) recommended the CQH Board approve the Merger Agreement and the
transactions contemplated thereby, including the Merger. Based upon such recommendation, the CQH Board has (i) determined that the Merger Agreement and the transaction contemplated thereby, including the Merger, are fair and reasonable to, and
in the best interests of, CQH and the holders of CQH Common Shares, (ii) approved the Merger Agreement and the transactions contemplated thereby, including the Merger, (iii) resolved to recommend approval of the Agreement by members of CQH
and (iv) directed that the Merger Agreement be submitted to the holders of the CQH Common Shares for their approval by written consent.
The
completion of the Merger is subject to certain customary closing conditions, including (i) Chenieres registration statement on Form S-4 (the Registration Statement) having become effective under the Securities Act of 1933, as
amended (the Securities Act), (ii) receipt of approval of the Merger Agreement by written consent of the members of CQH holding CQH Common Shares constituting a majority of the outstanding CQH Common Shares entitled to vote,
(iii) the Cheniere Common Stock issuable in connection with the Merger having been approved for listing on the NYSE American, subject to official notice of issuance and (iv) the absence of any governmental order prohibiting the
consummation of the Merger or the other transactions contemplated by the Merger Agreement. The obligation of each party to consummate the Merger is also conditioned upon the accuracy of the representations and warranties of the other party as of the
date of the Merger Agreement and as of the closing (subject to customary materiality qualifiers).
Cheniere, Merger Sub and CQH have made customary
representations, warranties and covenants in the Merger Agreement. Subject to certain exceptions, Cheniere and CQH have each agreed, among other things, to covenants relating to the conduct of their respective businesses during the interim period
between the execution of the Merger Agreement and the consummation of the Merger, including that, subject to applicable law, the regular quarterly dividend on the CQH Common Shares that is paid or payable during the calendar quarter ending
September 30, 2018 (the Second Quarter Distribution) will not be less than $0.56 per CQH Common Share without approval of the CQH Conflicts Committee. The closing of the Merger will not occur on or prior to the record date for the
Second Quarter Distribution.
The Merger Agreement contains certain termination rights that may be exercised by either Cheniere or CQH, including in the
event that (i) both parties agree by mutual written consent to terminate the Merger Agreement, (ii) the Merger is not consummated by December 18, 2018, or (iii) any order permanently restraining, enjoining or otherwise
prohibiting consummation of the Merger having become final and non-appealable.
The foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to
be complete and is qualified in its entirety by the actual Merger Agreement, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference. The representations, warranties, and covenants of each
party set forth in the Merger Agreement were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to the Merger Agreement, and may be subject to limitations agreed upon by the contracting
parties including (a) being qualified by confidential disclosures made for the purposes of allocating contractual risk between the respective parties to such agreements instead of establishing these matters as facts and (b) being subject
to standards of materiality that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the
parties thereto or of any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Merger Agreement, which subsequent information may or
may not be fully reflected in the Companys public disclosures.
Support Agreement
On June 18, 2018, concurrently with the execution of the Merger Agreement, Cheniere and CQH entered into a support agreement (the Support
Agreement), pursuant to which, subject to the terms and conditions therein, Cheniere has agreed to deliver a written consent (the Written Consent), covering all of the CQH Common Shares beneficially owned by it (the Covered
Shares), approving the Merger, Merger Agreement and any other matters necessary for consummation of the Merger and the other transactions contemplated in the Merger Agreement. The Written Consent will be delivered within two business days
after the Registration Statement becomes effective under the Securities Act. As of June 15, 2018, Cheniere owned 212,953,991 CQH Common Shares, representing approximately 91.9% of the total CQH Common Shares issued and outstanding. The approval
of the Merger Agreement requires the affirmative consent of holders of a majority of the outstanding CQH Common Shares.
The Support Agreement also
generally prohibits Cheniere from transferring the Covered Shares. The Support Agreement terminates upon the earliest to occur of the time the Merger becomes effective, the termination of the Merger Agreement and the written agreement of the parties
to the Support Agreement to terminate the Support Agreement.
The foregoing description of the Support Agreement and the transactions contemplated thereby
does not purport to be complete and is qualified in its entirety by the actual Support Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.