#United States #New York #Martin Midstream #Nut Tree #Caspian Capital

Nut Tree and Caspian Challenge Martin Midstream Merger

On December 2, 2024, Nut Tree Capital Management L.P. and Caspian Capital L.P. took significant action against the proposed merger of Martin Midstream Partners L.P. (MMLP) and Martin Resource Management Corporation (MRMC). The two firms, collectively holding 13.6% of MMLP's outstanding common units, have filed definitive proxy materials with the Securities and Exchange Commission (SEC) to contest the merger's approval and have prompted unitholders to vote "AGAINST" the deal at the upcoming special meeting on December 30, 2024.

Reasons for Opposition

Overvaluation Concerns

Nut Tree and Caspian argue that the merger terms—valuing MMLP at $4.02 per common unit—significantly undervalue the company. According to their analysis, MMLP’s potential as a publicly traded entity offers greater value creation opportunities that the current merger deal fails to recognize. The firms emphasize that the company’s future prospects are bright, and they believe the offered price would unjustly benefit insiders while depriving unitholders of fair value.

Questionable Financial Justifications

The two companies also criticized the financial analysis used to justify the merger. They contend that this analysis is deeply flawed and overlooks MMLP’s favorable long-term potential for growth and its ability to create value for stakeholders. Given the backdrop of potential conflicts of interest, particularly involving the management of MRMC, Nut Tree and Caspian assert that comprehensive scrutiny is warranted.

Urging for Unitholder Vigilance

In a letter addressed to MMLP’s unitholders, Nut Tree and Caspian expressed their belief that approval of the proposed merger would result in a detrimental transfer of value from unitholders to the company’s insiders, specifically pointing out Ruben Martin, III, the ultimate control person of MRMC. They stated, "By voting AGAINST the proposed merger with MRMC, MMLP unitholders have an opportunity to protect the value of their investment."

Additional Information

The complete text of their objection letter can be reviewed on their dedicated website at www.ProtectMMLPValue.com. Legal counsel to Nut Tree and Caspian includes Olshan Frome Wolosky LLP and Latham & Watkins LLP, indicating the seriousness with which they are approaching this matter.

In summary, the stakes are high as Nut Tree and Caspian mobilize efforts to safeguard what they believe constitutes a more accurate and fair valuation of Martin Midstream Partners. With the special meeting looming, MMLP unitholders are urged to consider the implications of the merger closely and weigh their voting power in support of their investment futures.