TULSA, Oklahoma -- Tulsa based SemGroup announced Monday it has rejected a hostile takeover bid from a Houston pipeline company.
SemGroup's Board of Directors said PlainsAll American Pipeline LP undervalued the company. It also noted the bid was "opportunistic and not compelling as it fails to adequately reflect SemGroup's bright prospects for stockholder value creation."
The Wall Street Journal reported the Houston company was seeking to spend $1 billion on SemGroup's outstanding shares.
The WSJ says PAA made an earlier offer to buy SemGroup, but was rejected earlier this month.
"We are disappointed that SemGroup's Board of Directors has refused to engage in constructive discussions with us regarding a possible transaction," said Greg L. Armstrong, PAA's Chairman and Chief Executive Officer.
The WSJ says PAA controls about 16,000 miles of crude oil and refined fuel pipelines stretching from western Canada to West Texas and the Gulf of Mexico.
SemGroup operates 2,400 miles of crude oil, natural gas, refined fuels and natural gas liquids pipelines stretching from Canada to South Texas and Mexico.