Suncoke Energy Partners fka SXCP

[couldbebetter]

Couch, Appreciate your comments to my questions. Yesterday I spoke with the IR guy to get a few questions answered. My take is that SXC will not be making a renewed takeover bid anytime soon. I believe SXC sees the current price as a good opportunity to add to their 60% (or so) stake.

In general an MLP should be fully valued at 8 1/2 X distributable cash. Based on 3 qtr numbers that would be $40 million X 4 = $160 million X 8.5 =
$1360 million or $29.44 per unit. You are probably correct that SXC could get SXCP for $21 or so, but the true value is certainly higher than that. Maybe they will continue to buy at these "low" prices knowing that eventually they will have to pay higher for the hard core holdouts.

Earnings should be at their best once all of the refurbishment work is complete. So 2019 - 2020 earnings should really look good. That could boost the MLP units but management will likely opt to use additional earnings to pay down debt (not to mention to keep SXCP units low so they can continue to acquire more.)

This is an interesting situation/play that could work out well for all holders so long as management continues to reduce debt and grow business.