UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Hiland Holdings GP, LP

(Exact name of registrant as specified in its charter)

DELAWARE (State or other jurisdiction of incorporation)		001-33018 (Commission File Number)		76-0828238 (IRS Employer Identification No.)

205 West Maple, Suite 1100
Enid, Oklahoma 73701
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (580) 242-6040


(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 1.01. Entry into a Material Definitive Agreement

     Merger Agreement

     On November 3, 2009, Hiland Holdings GP, LP, a Delaware limited partnership (the “Partnership”), announced that it had entered into Amendment No. 2 (the “Amendment”), dated November 3, 2009, to the Agreement and Plan of Merger dated as of June 1, 2009, with HH GP Holding, LLC, an Oklahoma limited liability company and an affiliate of Harold Hamm (“Parent”), HPGP MergerCo, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Parent (“Merger Sub” and together with Parent, the “Parent Parties”), and Hiland Partners GP Holdings, LLC, a Delaware limited liability company and the general partner of the Partnership, as amended by Amendment No. 1 thereto, dated October 26, 2009 (the “Agreement”), under which Merger Sub will be merged with and into the Partnership, with the Partnership continuing as the surviving entity (the “Merger”).

     Under the terms of the Amendment, the merger consideration payable to common unitholders of the Partnership pursuant to the Agreement increased from $2.40 to $3.20 per common unit and the end date of the Agreement was extended from November 6, 2009 until December 11, 2009. Mr. Hamm has also delivered to Parent an amendment (the “Commitment Letter Amendment”) to the funding commitment letter previously delivered to Parent on June 1, 2009 (the “Commitment Letter”), pursuant to which Mr. Hamm has committed to contribute the aggregate merger consideration contemplated under the Amendment of approximately $28.2 million.

     The Parent Parties’ obligation to effect the Merger is conditioned upon, among other things, the simultaneous consummation of the merger contemplated in the Agreement and Plan of Merger, dated as of June 1, 2009, entered into by Parent, HLND MergerCo, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Parent (“Hiland Partners Merger Sub”), Hiland Partners, LP, a Delaware limited partnership (“Hiland Partners”), and Hiland Partners GP, LLC, a Delaware limited liability company and the general partner of Hiland Partners, as amended by Amendment No. 1 thereto, dated October 26, 2009 (the “Hiland Partners Agreement”), under which Hiland Partners Merger Sub will be merged with and into Hiland Partners, with Hiland Partners continuing as the surviving entity. On November 3, 2009, Hiland Partners announced that it had entered into Amendment No. 2 to the Hiland Partners Agreement (the “Hiland Partners Amendment”) to increase the merger consideration payable to common unitholders of Hiland Partners from $7.75 to $10.00 per common unit and to extend the end date of the Hiland Partners Agreement from November 6, 2009 until December 11, 2009. Mr. Hamm also delivered to Parent an amendment (the “Hiland Partners Commitment Letter Amendment”) to the funding commitment letter previously delivered to Parent on June 1, 2009 (the “Hiland Partners Commitment Letter”), pursuant to which Mr. Hamm has committed to contribute the aggregate merger consideration contemplated under the Hiland Partners Amendment of approximately $41.3 million.

     Conflicts committees comprised entirely of independent members of the boards of directors of the general partners of the Partnership and Hiland Partners (collectively, the “Hiland Companies”) separately determined that the going-private transactions, as contemplated in the amended agreements, are advisable, fair to and in the best interests of the applicable Hiland Company and its public unitholders. In determining to make their recommendation to the boards of directors, each conflicts committee considered, among other things, the opinion received from its respective financial advisor as to the fairness of the increased merger consideration. Based on the recommendation of its conflicts committee, the board of directors of the general partner of each of the Partnership and Hiland Partners has approved the amendment to the applicable merger agreement and has recommended, along with its respective conflicts committee, that the public unitholders of the Partnership and Hiland Partners, respectively, approve the applicable merger.

     The foregoing summary of the Amendment, the Hiland Partners Amendment and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Amendment, the Commitment Letter Amendment, the Hiland Partners Amendment and the Hiland Partners Commitment Letter Amendment, which are attached as exhibits hereto, Amendment No. 1 to the Agreement and Amendment No. 1 to the Hiland Partners Agreement, which are attached as Exhibit 2.1 and Exhibit 2.2 to the Partnership’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on October 27, 2009, and the Agreement, the Hiland Partners Agreement, the Commitment Letter and the Hiland Partners Commitment Letter, which are attached as Exhibit 2.1, Exhibit 2.2, Exhibit 2.3 and Exhibit 2.4 to the Partnership’s Current Report on Form 8-K filed with the SEC on June 1, 2009.

     Loan from Harold Hamm

     On November 3, 2009, the Partnership borrowed $1.5 million from Harold Hamm and issued a term promissory note to Mr. Hamm in the principal amount of $1.5 million (the “Note”). The Note is secured by all of Hiland Holdings’ ownership interests in Hiland Partners and its general partner, other than the 2% general partner interest and the incentive distribution rights (the “Collateral”), and is subordinate to the security interest in the Collateral securing the Partnership’s borrowings under the First Amended and Restated Senior Secured Credit Agreement, dated as of August 7, 2009, between the Partnership and The Security National Bank of Enid (the “Credit Agreement”). The Note will accrue interest on the same terms as the Credit Agreement, a rate equal to the greater of: (i) the National Prime Rate (as defined in the Note) plus 1% and (ii) 5%. The Note will be fully due and payable on December 31, 2009. The loan proceeds will be used to fund working capital expenditures for the remainder of 2009, including fees and expenses associated with the Merger.

     This description of the Note does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Note, which is attached as an exhibit hereto.

     Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement

     The information set forth under “Item 1.01 — Loan from Harold Hamm” is incorporated herein by reference.

     Item 7.01. Regulation FD Disclosure

     On November 3, 2009, the Partnership and Hiland Partners issued a joint press release announcing that they had entered into the Amendment and the Hiland Partners Amendment, respectively, and that each of the Partnership and Hiland Partners had adjourned their respective special meeting of unitholders scheduled for November 3, 2009 to December 4, 2009. A copy of the press release is attached as Exhibit 99.1 hereto.

     The statements included in this Current Report on Form 8-K regarding any transaction with Harold Hamm and his affiliates, including statements regarding the intention to mail a supplement to the Hiland companies’ joint proxy statement and the intention to hold the special meetings on December 4, 2009, are forward-looking statements. These statements involve risks and uncertainties, including, but not limited to, the ability of the Hiland companies to receive clearance of the supplement by the SEC with a sufficient amount of time prior to the meeting date to permit distribution of the supplement, actions by regulatory authorities, market conditions, the Hiland Companies’ financial results and performance, satisfaction of closing conditions, actions by any other bidder and other factors detailed in risk factors and elsewhere in Hiland Partners’ and Hiland Holdings’ Annual Reports on Form 10-K and other filings with the SEC. Should one or more of these risks or uncertainties materialize (or the consequences of such a development worsen), or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected. The Hiland Companies disclaim any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.

     Item 9.01. Financial Statements and Exhibits.

     (d) Exhibits.

EXHIBIT NUMBER		DESCRIPTION
2.1		Amendment No. 2, dated November 3, 2009, to the Agreement and Plan of Merger, dated as of June 1, 2009, by and between Hiland Holdings GP, LP, Hiland Partners GP Holdings, LLC, HH GP Holding, LLC and HPGP MergerCo, LLC.
2.2		Amendment No. 2, dated November 3, 2009, to the Agreement and Plan of Merger, dated as of June 1, 2009, by and between Hiland Partners, LP, Hiland Partners GP, LLC, HH GP Holding, LLC and HLND MergerCo, LLC.
2.3		Amendment, dated November 3, 2009, to the funding commitment letter, dated as of June 1, 2009, by and between Harold Hamm and HH GP Holding, LLC (related to the Holdings GP, LP merger).
2.4		Amendment, dated November 3, 2009, to the funding commitment letter, dated as of June 1, 2009, by and between Harold Hamm and HH GP Holding, LLC (related to the Hiland Partners, LP merger).
10.1		$1.5 million Term Promissory Note between Hiland Holdings GP, LP and Harold Hamm, dated November 3, 2009.
99.1		Joint Press Release issued by Hiland Holdings GP, LP and Hiland Partners, LP on November 3, 2009.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

November 3, 2009