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Proposed Oneok takeover of Magellan opposed by shareholder EIP

Energy Income Partners said Thursday it plans to vote against the company’s proposed merger with Oneok (NYSE:OKE).

In a letter to the Magellan (MMP) board, EIP said it wants Magellan to remain a standalone entity whose returns on invested capital are far superior to Oneok (OKE).

EIP, the fourth largest shareholder in Magellan (MMP), said taxes paid by investors would exceed the premium offered by Oneok (OKE) and any other potential benefits from the merger.

“If EIP wanted to own an investment that is 77% Oneok and 23% Magellan, which we do not, we can do that by purchasing more Oneok on the open market without incurring this enormous tax liability,” the asset manager said in its letter.