LONDON, UK / ACCESSWIRE / December 12, 2016 / Active Wall St. blog coverage looks at the headline from Cheniere Energy, Inc. (NYSE MKT: LNG) ("Cheniere") as the company announced on December 9, 2016, that the negotiations with the conflicts segment of the board of directors of Cheniere Energy Partners LP Holdings, LLC (NYSE MKT: CQH) ("Cheniere Partners") has been terminated. The negotiations took place in reference to the previously announced proposal of Cheniere Energy to acquire all the publicly held shares of Cheniere Partners Holdings not owned by the former in a probable stock-for-stock transaction. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

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About the Companies

Cheniere Energy is a Houston-based energy company which primarily deals in LNG (Liquefied Natural Gas) business. The Sabine Pass LNG terminal in Louisiana is owned by the firm and it operates liquefaction projects near the site. Cheniere Energy played a major role in establishing US as the exporter of LNG. According to reports, Cheniere Energy initially intended to receive LNG when it opened the terminal in 2008 and started the operations. However, owing to excess natural gas released from shale formations, Cheniere Energy requested the US government to grant permission to reverse the flow and ship the gas abroad.

Cheniere Energy Partners L.P. is a publicly traded subsidiary of the Cheniere Energy, where it owns and operates the parent firm's assets. Cheniere Partners is currently monitoring the development, operation, and construction of the liquefaction facilities located next to the regasification plants at the Sabine Pass LNG terminal.

The primary LNG exporter

Since February 2016, production of LNG from shale formation has surged, and so have the shipments from the Sabine Pass terminal. The current average of shipments stood at an average 1.5 billion cubic feet gas a day since the exports were permitted from the facility. The real breakthrough was achieved when the company won approval to send shipments to big LNG buyers like Japan, which probably require additional government scrutiny.

The probable acquisition

Cheniere Energy stated on September 30, 2016, that it made an all-stock offer to acquire Cheniere Partners; valuing the company at $5.07 billion. The initial offering made, was of 0.5049 Cheniere's shares for each share of Cheniere Partners. The ratio offered valued the Cheniere Partners at a 3% premium, or a value of $21.90, against the previous closing price on September 29, 2016.

Cheniere Energy already holds an 80.1% stake in the firm, which owns and operates its assets. The negotiations went on for more than 6 weeks, and Cheniere Energy raised the exchange ratio to 0.54, considering the current financial implications. However, it finally determined, that, no definitive agreement could be reached with the conflicts committee as of now, and hence, the termination of the agreement.

Cheniere Energy is primarily banking on long-term contracts with entities for LNG supplies. Instead of chasing short-term deals and making a quick profit, Cheniere is probably aiming to generate a stable cash flow.

According to Jack Fusco, the CEO of Cheniere Energy:

"Having stability in the cash flow is more important to Cheniere than trying to play some spot market, or basis spreads throughout the world."

Stock Performance

Cheniere's share price finished last Friday's trading session at $43.01, marginally advancing 0.84%. A total volume of 3.47 million shares exchanged hands, which was higher than the 3 months average volume of 2.30 million shares. The stock has advanced 14.69% and 29.39% in the last month and past six months, respectively. Furthermore, since the start of the year, shares of the company have gained 15.46%. The stock currently has a market cap of $10.02 billion.

On Friday, the stock closed the trading session at $21.55, slipping 3.02% from its previous closing price of $22.22. A total volume of 514.06 thousand shares have exchanged hands, which was higher than the 3-month average volume of 204.49 thousand shares. Cheniere Partners Holdings' stock price advanced 8.45% in the last month, 7.37% in the past six months, and 31.76% in the previous twelve months. The company's shares have a dividend yield of 0.37% and currently have a market cap of $5.15 billion.

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SOURCE: Active Wall Street