The backstop for BWP will be when L takes out the 45% of BWP that they don't own. The current status quo with BWP that needs rebuilding (and probably large investments to get them growing again) makes no sense for L, imo. L now has a GP for BWP that is basically worthless (very little IDR because of the BWP distribution cuts). Retaining some cash flow will help, but it will be long drawn out process to get BWP going gain. If L takes out the BWP units they don't own, they could maybe put another billion or two in it and then eventually IPO it again. L has more than 4B$ in cash at the holding level, so funding is not a problem.
Even "thumbsuckers" like the Tisch brother should see that. Anyways, even at the reduced 2014 forecast, BWP will have 1.64$ in distributable cash, so with a 13$ price/unit, that is better than a 12% cash flow yield. I also think that there is decent chance of a takeout, which imo would need to occur at a decent premium to the current price.
I have not done anything, as I have been taking time to evaluate the situation, but I think i would get a chunk if units at 13$ or thereabouts. |
