Buckeye GP Holdings shareholders should reject owners' tender offer
The privately held owners of most units of Buckeye GP Holdings (BGH) made a tender offer for $17 today with the intention of taking the entire company private. I believe they're trying to take advantage of market conditions and making a lowball offer. Buckeye GP Holdings yields 8.7% today and should be able to grow distributions over 10% annually going forward; the underlying assets are high quality and relatively low risk. The offer significantly understates BGH's potential. I don't know how much of a chance minority owners have to reject this buy-under, but I wouldn't be surprised if a lot of them do. I've ended my pick in CAPS but I would vote to reject management's offer if I owned the stock.
Meanwhile, I suggest interested investors look at Magellan (MGG) and Enterprise GP Holdings (EPE) for publicly traded GPs.