Marathon ups Cash Portion of MarkWest Offer

Marathon Petroleum Corp raised for the second time the cash portion of its offer for U.S. natural gas processor MarkWest Energy Partners LP by $210 million to $1.28 billion, nearly double what it had offered initially.

The two companies said on Tuesday Marathon would now offer $6.20 in cash and 1.09 units of its pipeline division MPLX LP for each MarkWest unit.

However, the value of the total offer has fallen to $10.38 billion as of Monday from $15.6 billion when the deal was announced on July 13 as MPLX shares have dropped nearly 40 percent since then.

Marathon had raised the cash portion of its offer to $5.21 per unit on Nov. 10 from $3.37 in July, after MarkWest shareholder and former chief executive John Fox said the deal would lead to a big cut in cash distributions to unitholders.

The acquisition will create the fourth-largest master limited partnership.

The total offer now translates to $51.74 per unit, a 14 percent premium to MarkWest's Monday close, but lower than $78.64 in July.

Fox, who holds 0.7 percent stake in MarkWest, has said it should remain a standalone company.

However, Kayne Anderson Capital Advisors LP, Tortoise Capital Advisors LLC and the Energy & Minerals Group - three of MarkWest's largest unitholders with combined holding of more than 15 percent - have agreed to vote in favor of the deal.

Reporting by Amrutha Gayathri