NEW YORK, Oct 22 (Reuters) - Hedge funds Nut Tree

Capital Management and Caspian Capital are planning to oppose

the takeover of Martin Midstream Partners ( MMLP ) by the

company's largest shareholder, according to a joint statement

from the funds.

The hedge funds, which made a competing bid to buy Martin

Midstream ( MMLP ) for $4.50 per unit in July, have argued that Martin

Resource Management Corporation's $157 million deal to buy

Martin Midstream ( MMLP ) undervalues the fuels storage and transporter

and raises concerns over conflicts of interest.

MRMC and Martin Midstream ( MMLP ) did not immediately respond to

requests for comment.

Earlier in October, MRMC agreed to buy the common units of

Martin Midstream ( MMLP ) it did not already own for $4.02 per unit in

cash, after having initially offered to acquire the company

for$3.05 per unit. The offer represented a 34% premium to Martin

Midstream's ( MMLP ) closing share price on May 23, the day before MRMC's

initial bid was made public.

Nut Tree Capital Management and Caspian Capital, which own

13.2% of Martin Midstream ( MMLP ), are planning to vote against the MRMC

deal and said they will file regulatory paperwork that will

allow them to petition other shareholders to reject the buyout,

according to the statement that was seen by Reuters on Tuesday.

It would, however, be challenging for the hedge funds to

block the MRMC deal, because unitholders allied with MRMC that

represent 26% of the common units are planning to vote for the

deal. The transaction requires the approval of the holders of a

majority of the outstanding common units of Martin Midstream ( MMLP ).

A date for the vote has not yet been disclosed.

MRMC is headed by Ruben S. Martin III, whose father in 1951

set up the business to which MRMC and Martin Midstream ( MMLP ) trace

their roots.

Martin Midstream ( MMLP ) is structured as a tax-efficient master

limited partnership. In an MLP, the ownership is split into

publicly traded common units, and also general partner (GP)

units that have outsized influence because the owner of these

units controls the governance of the partnership. MRMC controls

the GP stake.

(Reporting by David French in New York; Editing by Muralikumar

Anantharaman)