Normally, when a company proposes to buy a competitor for a roughly 22% premium, investors are fairly pleased. But when Oneok (NYSE: OKE) agreed to a 22% premium so it could acquire Magellan Midstream Partners (NYSE: MMP), one of Megallan's largest unitholders cried foul. The vote on the deal is drawing near, and Magellan's stock is trading at a discount to the takeover price, but most investors should stay far away from this complicated mess -- if they can.

Oneok is a natural gas-focused midstream company. Magellan is an oil and refined products-focused midstream master limited partnership (MLP). And Energy Income Partners is a pooled investment vehicle that is one of the largest shareholders in Magellan. The most important factor here is that Magellan is structured as an MLP. That makes it a passthrough entity, so unitholders are basically treated as if they own the company directly and are responsible for their portion of the MLP's Income taxes. That can lead to a lot of complications, most notably the yearly K-1 form investors have to deal with at tax time.

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Source Fool.com