Blackstone deal for Energy Transfer asset stake said to collapse

Blackstone Group is no longer in talks to buy a $5 billion stake in assets owned by Energy Transfer Partners, people with knowledge of the matter said.

The discussions fell through after the Wall Street Journal reported them last month, said one of the people, who asked not to identified because the information is private. The shares of Energy Transfer Partners jumped as much as 5 percent on the Journal’s report, hurting the economics of the deal, the people familiar with the situation said.

A representative of Blackstone declined to comment, while a representative of Energy Transfer didn’t respond to a request for comment.

The private placement announced on Monday by Energy Transfer worth about $568 million is in lieu of the Blackstone deal, one of the people said. That transaction involves its parent entity, Energy Transfer Equity LP, using the proceeds from the sale of 32.2 million common units to purchase 15.8 million units in Energy Transfer Partners, according to a statement.

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Energy Transfer Equity’s shares fell as much as 5.7 percent in New York.

Energy Transfer Equity, one of the largest oil and gas infrastructure companies in the U.S., is streamlining to conserve cash and pay down debt. Energy Transfer Partners agreed to sell itself in November to sister company Sunoco Logistics Partners LP in a deal that valued the company at $21.3 billion. The group is in the process of building the controversial Dakota Access oil pipeline.

Blackstone Group, one of the largest buyout firms in the world, closed a $4.5 billion energy fund last year.