SEC Form SC 13E3/A filed by Sprague Resources LP (Amendment)

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 13E-3

TRANSACTION STATEMENT UNDER SECTION 13(e) OF THE
SECURITIES EXCHANGE ACT OF 1934 AND
RULE 13e-3 THEREUNDER

Rule 13e-3 Transaction Statement
Under Section 13(e) of the Securities Exchange Act of 1934
(Amendment No. 2)

This statement is filed in connection with (check the appropriate box):

Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: ¨

Check the following box if the filing is a final amendment reporting the results of the transaction: ¨

EXPLANATORY NOTE

On August 31, 2022, Sprague Resources LP, a Delaware limited partnership (the “Partnership”), Sprague Resources GP LLC, a Delaware limited liability company and the general partner of the Partnership (the “Partnership GP”), Sprague HP Holdings, LLC, a Delaware limited liability company and a wholly owned subsidiary of Hartree (as defined below) (“Sprague Holdings”), and Sparrow HP Merger Sub, LLC, a Delaware limited liability company (“Merger Sub”), entered into Amendment No. 1 (the “Merger Agreement Amendment”) to the Merger Agreement (as defined below).

The Merger Agreement Amendment, among other things, provides (i) that the closing of the Merger (as defined below) (the “Closing”) may not occur prior to November 28, 2022 (the “Inside Date”), unless otherwise agreed to by Sprague Holdings, (ii) that the Outside Date (as defined in the Merger Agreement) shall be extended from December 2, 2022 to March 2, 2023, (iii) that each Common Unit (as defined below) (other than the Sprague Holdings Units (as defined below)) issued and outstanding immediately prior to the Effective Time (as defined below) will be converted into the right to receive (A) $19.00 per Common Unit in cash without any interest thereon as Base Merger Consideration (as defined below) and (B) an additional $1.00 per Common Unit in cash without any interest thereon as consideration for the amendment to the Inside Date, (iv) for the removal of the closing conditions in the Merger Agreement that are specific to Sprague Holdings, (v) that Partnership GP shall declare, and shall cause the Partnership to pay, a cash distribution to holders of Common Units for the calendar quarter ending September 30, 2022, in an amount not less than $0.4338 per Common Unit, regardless of whether the Closing occurs prior to September 30, 2022, and (vi) during the period from the date of the Merger Agreement Amendment to the Effective Time, Sprague Holdings and Merger Sub shall not cause, direct or permit the Partnership GP or any of its affiliates to exercise the right to acquire Limited Partner Interests (as defined in the Partnership Agreement (as defined below)) pursuant to Section 15.1 of the Partnership Agreement.

INTRODUCTION

This Amendment No. 2 to the Rule 13e-3 Transaction Statement on Schedule 13E-3 (as amended, this “Transaction Statement”), together with the exhibits hereto, is being filed with the Securities and Exchange Commission (the “SEC”) pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), by: (i) the Partnership, as the issuer of the common units representing limited partner interests in the Partnership (“Common Units”) that are subject to the Rule 13e-3 transaction; (ii) Sprague Holdings; (iii) Merger Sub; (iv) Partnership GP; (v) Hartree Partners, LP, a Delaware limited partnership (“Hartree”); and (vi) Hartree Partners GP, LLC, a Delaware limited liability company and the general partner of Hartree. Collectively, the persons filing this Transaction Statement are referred to as the “filing persons.”

This Transaction Statement relates to the Agreement and Plan of Merger, dated as of June 2, 2022 (the “Original Merger Agreement” and, as amended by the Merger Agreement Amendment, the “Merger Agreement”), by and among the Partnership, Partnership GP, Sprague Holdings and Merger Sub. Pursuant to the Merger Agreement, Sprague Holdings has agreed to acquire each issued and outstanding Common Unit (other than Common Units held by Sprague Holdings or its permitted transferees (“Sprague Holdings Units”)) under the terms of the Merger Agreement. Under the terms and subject to the conditions of the Merger Agreement, Merger Sub will merge with and into the Partnership, with the Partnership surviving as a wholly owned subsidiary of Sprague Holdings and Partnership GP (the “Merger”), both of which are controlled subsidiaries of Hartree. The Merger will become effective upon the filing of a properly executed certificate of merger with the Secretary of State of the State of Delaware or at such later date and time as may be agreed by the parties and set forth in the certificate of merger (the “Effective Time”). The Merger Agreement provides that, at the Effective Time, each Common Unit issued and outstanding as of immediately prior to the Effective Time (other than the Sprague Holdings Units) will be converted into the right to receive $19.00 in cash (the “Base Merger Consideration”) plus, pursuant to the Merger Agreement Amendment, an additional $1.00 per Common Unit as additional consideration (such amount, together with the Base Merger Consideration, the “Merger Consideration”), in each case to be paid without interest and reduced by any applicable tax withholding. As of the Effective Time, all of the Common Units converted into the right to receive the Merger Consideration will no longer be outstanding and will automatically be canceled and cease to exist.

The Sprague Holdings Units, Incentive Distribution Rights (as defined in the Partnership’s First Amended and Restated Agreement of Limited Partnership, dated as of October 30, 2013 (as amended, the “Partnership Agreement”)) held by Sprague Holdings and its permitted transferees and the General Partner Interest (as defined in the Partnership Agreement) issued and outstanding immediately prior to the Effective Time will be unaffected by the Merger, will remain outstanding and no consideration will be delivered in respect thereof.

The Closing will occur on the third business day after the satisfaction or waiver of the conditions to the Merger provided in the Merger Agreement (other than the conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions), or at such other date or time as the Partnership and Sprague Holdings agree. However, pursuant to the Merger Agreement Amendment, the Closing may not occur prior to November 28, 2022, without the consent of Sprague Holdings.

The conflicts committee (the “Conflicts Committee”) of the board of directors of Partnership GP has (i) determined that the Original Merger Agreement and the consummation of the transactions contemplated thereby, including the Merger, are in the best interests of the Partnership and the Partnership’s unaffiliated unitholders (the “Unaffiliated Unitholders”), (ii) approved the Original Merger Agreement and the consummation of the transactions contemplated thereby, including the Merger, which action constituted “Special Approval” (as defined in Section 7.9(b) of the Partnership Agreement) by the Conflicts Committee, (iii) resolved to recommend the submission of the Original Merger Agreement to a vote of the Limited Partners (as defined in the Partnership Agreement) by written consent pursuant to Section 13.11 of the Partnership Agreement and (iv) directed Partnership GP and the Partnership to enter into the Original Merger Agreement and to consummate the transactions contemplated thereby, including the Merger, upon the terms and conditions set forth in the Original Merger Agreement. In determining whether to make its recommendation, the Conflicts Committee considered, among other things, the opinion of Jefferies LLC (“Jefferies”), the financial advisor to the Conflicts Committee, to the effect that, as of the date of its opinion, and based upon the assumptions made, matters considered, procedures followed, and qualifications and limitations of the review undertaken in rendering its opinion as set forth therein, the Merger Consideration to be received by the Unaffiliated Unitholders pursuant to the Original Merger Agreement was fair, from a financial point of view, to the Partnership and the Unaffiliated Unitholders. On August 30, 2022, the Conflicts Committee determined that the Merger Agreement Amendment is in the best interests of the Partnership and the Unaffiliated Unitholders and directed Partnership GP and the Partnership to enter into the Merger Agreement Amendment.

Under the applicable provisions of the Partnership Agreement, approval of the Merger Agreement and the transactions contemplated thereby, including the Merger, requires the affirmative vote or consent of the holders of a majority of the outstanding Common Units. As permitted by the Delaware Revised Uniform Limited Partnership Act and the Partnership Agreement, immediately following the execution of the Merger Agreement, Sprague Holdings, as the record and beneficial owner of approximately 74.5% of the issued and outstanding Common Units, which constitutes a “Unit Majority” (as defined in the Partnership Agreement), delivered to the Partnership an irrevocable written consent adopting the Merger Agreement and approving the transactions contemplated thereby, including the Merger, pursuant to the terms of the Partnership Agreement. Assuming the timely satisfaction or waiver of the conditions set forth in the Merger Agreement, the Partnership currently anticipates that the Merger will be completed in the fourth quarter of 2022.

On August 4, 2022, the Partnership filed a definitive information statement (the “Definitive Information Statement”) under Section 14(c) of the Exchange Act relating to the Merger Agreement and the transactions contemplated thereby, including the Merger. The Definitive Information Statement was supplemented by the Partnership with certain additional information set forth in the Partnership’s Current Report on Form 8-K, filed with the SEC on September 2, 2022 (File No. 001-36137) (the “Supplemental 8-K”). References to the “Information Statement” in this Transaction Statement are to the Definitive Information Statement as supplemented by the Supplemental 8-K. A copy of the Definitive Information Statement is attached hereto as Exhibit (a)(1). A copy of the Merger Agreement is attached as Annex A to the Information Statement. A copy of the Merger Agreement Amendment is attached hereto as Exhibit (d)(2). All references in this Transaction Statement to Items numbered 1001 to 1016 are references to Items contained in Regulation M-A under the Exchange Act.

Pursuant to General Instruction F to Schedule 13E-3, the information contained in the Information Statement, including all annexes thereto, is incorporated herein by reference in its entirety and responses to each item herein are qualified in their entirety by the information contained in the Information Statement and the annexes thereto. The cross-references below are being supplied pursuant to General Instruction G to Schedule 13E-3 and show the location in the Information Statement of the information required to be included in response to the items of Schedule 13E-3. Terms used but not defined in this Transaction Statement have the meanings given to them in the Information Statement.

All information concerning the Partnership contained in, or incorporated by reference into, this Transaction Statement was supplied by the Partnership. Similarly, all information concerning any other filing person contained in, or incorporated by reference into, this Transaction Statement was supplied by such filing person.

Regulation M-A Item 1001

The information set forth in the Information Statement under the following captions is incorporated herein by reference:

“Summary Term Sheet”

“Questions and Answers about the Merger”

Regulation M-A Item 1002

“Summary Term Sheet—Parties to the Merger Agreement”

“Summary Term Sheet—Action Approved by Written Consent of Unitholders Representing a Unit Majority”

“Unit Ownership of Certain Beneficial Owners and Management”

“Common Unit Market Price and Distribution Information—Common Unit Market Price Information”

“Common Unit Market Price and Distribution Information—Distribution Information”

“The Merger—Background of the Merger”

Regulation M-A Item 1003

“Summary Term Sheet—Parties to the Merger Agreement”

“Information Concerning the Partnership”

“Information Concerning the Hartree Filing Parties—Identity and Background of the Hartree Filing Parties”

(c) Business and Background of Natural Persons. Not applicable.

Regulation M-A Item 1004

“Summary Term Sheet”

“Questions and Answers about the Merger”

“The Merger—Effects of the Merger”

“The Merger—Background of the Merger”

“The Merger—Recommendation of the Conflicts Committee; Reasons for Recommending Approval of the Merger”

“The Merger—Interests of the Directors and Executive Officers of Partnership GP in the Merger”

“The Merger—Position of the Hartree Filing Parties as to the Fairness of the Merger”

“The Merger—Purpose and Reasons of the Hartree Filing Parties for the Merger”

“The Merger—Primary Benefits and Detriments of the Merger”

“The Merger—Ownership of the Partnership After the Merger”

“The Merger—Financing of the Merger”

“The Merger—Provisions for Unaffiliated Unitholders”

“The Merger—No Appraisal Rights”

“The Merger Agreement”

“Certain Purchases and Sales of Common Units”

“Material U.S. Federal Income Tax Consequences of the Merger”

Annex A: Merger Agreement

“Summary Term Sheet”

“Questions and Answers about the Merger”

“The Merger—Effects of the Merger”

“The Merger—Interests of the Directors and Executive Officers of Partnership GP in the Merger”

“The Merger—Financing of the Merger”

“The Merger—Provisions for Unaffiliated Unitholders”

“The Merger—No Appraisal Rights”

“The Merger Agreement”

Annex A: Merger Agreement

“Summary Term Sheet—No Appraisal Rights”

“Questions and Answers about the Merger”

“The Merger—No Appraisal Rights”

“The Merger—Provisions for Unaffiliated Unitholders”

Regulation M-A Item 1005

“Summary Term Sheet”

“The Merger—Interests of the Directors and Executive Officers of Partnership GP in the Merger”

“Information Concerning the Partnership—About the Partnership”

“Information Concerning the Hartree Filing Parties—Identity and Background of the Hartree Filing Parties”

“Where You Can Find More Information”

Annex C: The Partnership’s Annual Report on Form 10-K for the Year Ended December 31, 2021

The Partnership’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022, are incorporated herein by reference.

“Summary Term Sheet”

“The Merger—Effects of the Merger”

“The Merger—Background of the Merger”

“The Merger—Recommendation of the Conflicts Committee; Reasons for Recommending Approval of the Merger”

“The Merger—Financing of the Merger”

“The Merger—Interests of the Directors and Executive Officers of Partnership GP in the Merger”

“The Merger—Position of the Hartree Filing Parties as to the Fairness of the Merger”

“The Merger—Purpose and Reasons of the Hartree Filing Parties for the Merger”

“The Merger Agreement”

“Past Contacts, Transactions and Negotiations”

Annex A: Merger Agreement

Annex C: The Partnership’s Annual Report on Form 10-K for the Year Ended December 31, 2021

The Partnership’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022, are incorporated herein by reference.

“Summary Term Sheet”

“Questions and Answers about the Merger”

“The Merger—Effects of the Merger”

“The Merger—Interests of the Directors and Executive Officers of Partnership GP in the Merger”

“The Merger Agreement”

“Common Unit Market Price and Distribution Information”

“Where You Can Find More Information”

Annex A: Merger Agreement

Annex C: The Partnership’s Annual Report on Form 10-K for the Year Ended December 31, 2021

The Partnership’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022, are incorporated herein by reference.

Regulation M-A Item 1006

“Summary Term Sheet”

“Questions and Answers about the Merger”

“The Merger—Effects of the Merger”

“The Merger—Background of the Merger”

“The Merger—Recommendation of the Conflicts Committee; Reasons for Recommending Approval of the Merger”

“The Merger—Position of the Hartree Filing Parties as to the Fairness of the Merger”

“The Merger—Purpose and Reasons of the Hartree Filing Parties for the Merger”

“The Merger—Interests of the Directors and Executive Officers of Partnership GP in the Merger”

“Summary Term Sheet”

“Questions and Answers about the Merger”

“The Merger—Effects of the Merger”

“The Merger—Financing of the Merger”

“The Merger—Primary Benefits and Detriments of the Merger”

“The Merger—Delisting and Deregistration of Common Units”

“The Merger—Interests of the Directors and Executive Officers of Partnership GP in the Merger”

“Delisting and Deregistration”

Annex A: Merger Agreement

“Summary Term Sheet”

“Questions and Answers about the Merger”

“The Merger—Effects of the Merger”

“The Merger—Background of the Merger”

“The Merger—Recommendation of the Conflicts Committee; Reasons for Recommending Approval of the Merger”

“The Merger—Interests of the Directors and Executive Officers of Partnership GP in the Merger”

“The Merger—Position of the Hartree Filing Parties as to the Fairness of the Merger”

“The Merger—Purpose and Reasons of the Hartree Filing Parties for the Merger”

“The Merger—Primary Benefits and Detriments of the Merger”

“The Merger—Financing of the Merger”

“Delisting and Deregistration”

“The Merger Agreement”

Annex A: Merger Agreement

Regulation M-A Item 1013

“Summary Term Sheet”

“Questions and Answers about the Merger”

“The Merger—Effects of the Merger”

“The Merger—Background of the Merger”

“The Merger—Recommendation of the Conflicts Committee; Reasons for Recommending Approval of the Merger”

“The Merger—Position of the Hartree Filing Parties as to the Fairness of the Merger”

“The Merger—Purpose and Reasons of the Hartree Filing Parties for the Merger”

“The Merger—Interests of the Directors and Executive Officers of Partnership GP in the Merger”

“Summary Term Sheet—No Solicitation by Partnership GP or the Partnership of Alternative Proposals”

“The Merger—Background of the Merger”

“The Merger—Recommendation of the Conflicts Committee; Reasons for Recommending Approval of the Merger”

“The Merger—Opinion of Financial Advisor to the Conflicts Committee”

“The Merger—Financial Advisor Discussion Materials Provided to Hartree Partners, LP”

“The Merger—Position of the Hartree Filing Parties as to the Fairness of the Merger”

“The Merger—Purpose and Reasons of the Hartree Filing Parties for the Merger”

Annex B: Written Opinion of Jefferies to the Conflicts Committee

“Summary Term Sheet”

“Questions and Answers About the Merger”

“The Merger—Effects of the Merger”

“The Merger—Background of the Merger”

“The Merger—Recommendation of the Conflicts Committee; Reasons for Recommending Approval of the Merger”

“The Merger—Opinion of Financial Advisor to the Conflicts Committee”

“The Merger—Financial Advisor Discussion Materials Provided to Hartree Partners, LP”

“The Merger—Interests of the Directors and Executive Officers of Partnership GP in the Merger”

“The Merger—Position of the Hartree Filing Parties as to the Fairness of the Merger”

“The Merger—Purpose and Reasons of the Hartree Filing Parties for the Merger”

Annex B: Written Opinion of Jefferies to the Conflicts Committee

“Summary Term Sheet”

“Questions and Answers about the Merger”

“The Merger—Effects of the Merger”

“The Merger—Background of the Merger”

“The Merger—Recommendation of the Conflicts Committee; Reasons for Recommending Approval of the Merger”

“The Merger—Interests of the Directors and Executive Officers of Partnership GP in the Merger”

“The Merger—Position of the Hartree Filing Parties as to the Fairness of the Merger”

“The Merger—Purpose and Reasons of the Hartree Filing Parties for the Merger”

“The Merger—Financing of the Merger”

“The Merger—Primary Benefits and Detriments of the Merger”

“The Merger—Ownership of the Partnership After the Merger”

“The Merger—Delisting and Deregistration of Common Units”

“The Merger Agreement”

“Delisting and Deregistration”

“Material U.S. Federal Income Tax Consequences of the Merger”

Annex A: Merger Agreement

Regulation M-A Item 1014

The information set forth in the Information Statement under the following captions is incorporated herein by reference:

“Summary Term Sheet”

“The Merger—Background of the Merger”

“The Merger—Recommendation of the Conflicts Committee; Reasons for Recommending Approval of the Merger”

“The Merger—Opinion of Financial Advisor to the Conflicts Committee”

“The Merger—Financial Advisor Discussion Materials Provided to Hartree Partners, LP”

“The Merger—Interests of the Directors and Executive Officers of Partnership GP in the Merger”

“The Merger—Position of the Hartree Filing Parties as to the Fairness of the Merger”

“The Merger—Purpose and Reasons of the Hartree Filing Parties for the Merger”

Annex B: Written Opinion of Jefferies to the Conflicts Committee

“Summary Term Sheet—Action Approved by Written Consent of Unitholders Representing a Unit Majority”

“Questions and Answers about the Merger”

“The Merger—Recommendation of the Conflicts Committee; Reasons for Recommending Approval of the Merger”

“The Merger Agreement—Unitholder Approval”

“Summary Term Sheet”

“The Merger—Effects of the Merger”

“The Merger—Background of the Merger”

“The Merger—Recommendation of the Conflicts Committee; Reasons for Recommending Approval of the Merger”

“The Merger—Opinion of Financial Advisor to the Conflicts Committee”

“The Merger—Interests of the Directors and Executive Officers of Partnership GP in the Merger”

“The Merger Agreement”

Annex B: Written Opinion of Jefferies to the Conflicts Committee

“Summary Term Sheet”

“Questions and Answers about the Merger”

“The Merger—Background of the Merger”

“The Merger—Recommendation of the Conflicts Committee; Reasons for Recommending Approval of the Merger”

“The Merger—Position of the Hartree Filing Parties as to the Fairness of the Merger”

Regulation M-A Item 1015

The information set forth in the Information Statement under the following captions is incorporated herein by reference:

“Summary Term Sheet—Opinion of Financial Advisor to the Conflicts Committee”

“The Merger—Effects of the Merger”

“The Merger—Background of the Merger”

“The Merger—Opinion of Financial Advisor to the Conflicts Committee”

“The Merger—Financial Advisor Discussion Materials Provided to Hartree Partners, LP”

“The Merger—Position of the Hartree Filing Parties as to the Fairness of the Merger”

“The Merger—Purpose and Reasons of the Hartree Filing Parties for the Merger”

“The Merger—Fees and Expenses”

“Where You Can Find More Information”

Annex B: Written Opinion of Jefferies to the Conflicts Committee

The written opinion of Jefferies is attached to the Information Statement as Annex B and is incorporated herein by reference.

Regulation M-A Item 1007

“Summary Term Sheet—Merger Consideration”

“Summary Term Sheet—Conditions to Consummation of the Merger”

“Summary Term Sheet—Fees and Expenses”

“Summary Term Sheet—Financing of the Merger”

“The Merger—Background of the Merger”

“The Merger—Recommendation of the Conflicts Committee; Reasons for Recommending Approval of the Merger”

“The Merger—Interests of the Directors and Executive Officers of Partnership GP in the Merger”

“The Merger—Regulatory Approvals and Clearances Required for the Merger”

“The Merger—Financing of the Merger”

“The Merger—Fees and Expenses”

“The Merger Agreement”

“Summary Term Sheet—Fees and Expenses”

“The Merger—Financing of the Merger”

“The Merger—Fees and Expenses”

“The Merger Agreement—Expenses”

Regulation M-A Item 1008

“Summary Term Sheet—Parties to the Merger Agreement”

“Summary Term Sheet—The Merger”

“Summary Term Sheet—Treatment of Sprague Holdings Units, General Partner Interest and Incentive Distribution Rights”

“The Merger—Effects of the Merger”

“The Merger—Interests of the Directors and Executive Officers of Partnership GP in the Merger”

“The Merger Agreement”

“Certain Purchases and Sales of Common Units”

“Delisting and Deregistration”

“Unit Ownership of Certain Beneficial Owners and Management”

Regulation M-A Item 1012

“Summary Term Sheet”

“Questions and Answers about the Merger”

“The Merger—Recommendation of the Conflicts Committee; Reasons for Recommending Approval of the Merger”

“The Merger—Interests of the Directors and Executive Officers of Partnership GP in the Merger”

“The Merger—Position of the Hartree Filing Parties as to the Fairness of the Merger”

“The Merger—Purpose and Reasons of the Hartree Filing Parties for the Merger”

“The Merger Agreement—Conditions to Consummation of the Merger”

Regulation M-A Item 1010

“The Merger—Effects of the Merger”

“Selected Historical Consolidated Financial Data”

“Where You Can Find More Information”

Annex C: The Partnership’s Annual Report on Form 10-K for the Year Ended December 31, 2021

The Partnership’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022, are incorporated herein by reference.

Regulation M-A Item 1009

“Summary Term Sheet”

“Questions and Answers about the Merger”

“The Merger—Background of the Merger”

“The Merger—Recommendation of the Conflicts Committee; Reasons for Recommending Approval of the Merger”

“The Merger—Opinion of Financial Advisor to the Conflicts Committee”

“The Merger—Financial Advisor Discussion Materials Provided to Hartree Partners, LP”

“The Merger—Interests of the Directors and Executive Officers of Partnership GP in the Merger”

“The Merger—Fees and Expenses”

Regulation M-A Item 1011

Regulation M-A Item 1016

^* Previously Filed

SIGNATURES

After due inquiry and to the best of each of the undersigned’s knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated as of September 2, 2022