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Plains GP Holdings Nets $2.82B in Year's Biggest IPO

Houston-based Plains All American Pipeline LP's recently formed general partner, Plains GP Holdings, on Wednesday raised $2.82 billion in the nation's largest initial public offering (IPO) so far this year. The IPO offered 128 million shares at $22/share, and after the first day of trading the closing price settled at the offered amount.

The oil/natural gas liquids (NGL) transportation and storage firm had hoped to raise up to $3 billion with expected prices in the $22-$25/share range, according to Don Dion at Seeking Alpha, the financial information services firm.

Plains GP owns a nonvoting 21% interest in the Plains All American Pipeline (PAA) master limited partnership (MLP). The $2.82 billion raised went to the current owners and managers of the Plains MLP.

Initially at least, the share price in the Plains IPO did not take off as one earlier in the month by Marcellus Shale gas producer Antero Resources did when it opening share price shot up more than 18% a week ago (Oct. 10) (see Shale Daily, Oct. 11). More than 28.4 million shares traded the first day with Antero's stock, the most-traded stock on the day.

In contrast, Plains GP's IPO first-day trading was considered light with only a third of the 128 million shares being offered actually traded.

PAA formed Plains GP in July this year, and after the IPO it now controls $19.2 billion in assets, about $21 billion in total revenues and $834 million of net income, along with the MLP's member equity and partners' capital collectively totaling $7.4 billion, according to Seeking Alpha's Dion.

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