Brookfield Infrastructure Partners L.P. (NYSE: BIP; TSX: BIP.UN),
together with its institutional partners (collectively,
“
Brookfield Infrastructure”) has filed an
application with the Alberta Securities Commission (the
“
ASC”) challenging the defensive tactics
inappropriately employed by Inter Pipeline Ltd. (TSX: IPL)
(“
IPL”) and the special committee of its board of
directors.
Our application seeks, on behalf of all IPL
shareholders, the elimination of the $350 million termination fee
(the “Break Fee”), agreed to by IPL and its board
of directors, which threatens to enrich Pembina Pipeline
Corporation (“Pembina”) at the expense of IPL’s
existing shareholders. This Break Fee was agreed in the face of a
clearly superior proposal submitted by Brookfield Infrastructure to
IPL’s special committee on May 31, 2021 (the “Enhanced
Brookfield Proposal”). The superiority of the Enhanced
Brookfield Proposal, combined with the questionable basis for
agreeing to the Break Fee, are two of the many reasons why the
Break Fee should not be allowed to stand. If successful in
eliminating or otherwise reducing the Break Fee, Brookfield
Infrastructure will further increase our offer to IPL shareholders
by an equivalent amount.
The Enhanced Brookfield Proposal offers IPL
shareholders a choice between $19.50 in cash and 0.225 of a class A
exchangeable subordinate voting share (a “BIPC
Share”) of Brookfield Infrastructure Corporation
(“BIPC”)1. As we have previously stated, we
believe IPL’s board of directors erred in not recognizing the
Enhanced Brookfield Proposal to be a superior proposal to all of
IPL’s other available alternatives. The Enhanced Brookfield
Proposal was:
- Higher than the $19.45 announced
value of the transaction entered into with Pembina,
- Clearly subject to significantly
less conditionality,
- Highly actionable as evidenced by
Brookfield Infrastructure’s immediate amendment of its offer to IPL
shareholders, and
- Clearly superior in composition,
with a significant cash component versus the all-share Pembina
alternative.
1 Based on the TSX closing price of the BIPC Shares on May 28,
2021.
In its application, Brookfield Infrastructure is
seeking either (i) an order restraining the payment of the Break
Fee, or (ii) a cease trade order, in each case in respect of the
proposed acquisition of IPL by Pembina pursuant to an arrangement
agreement (the “Arrangement Agreement”) announced
by IPL and Pembina on June 1, 2021. Brookfield Infrastructure is
also seeking an order from the ASC cease trading the two
shareholders’ rights plans currently maintained by IPL (the
“IPL Rights Plans”), one of which was adopted as a
tactical response to Brookfield Infrastructure’s offer to IPL
shareholders on February 22, 2021. Our position is that:
- IPL and its special committee have
engaged in conduct that is contrary to the public interest.
- In entering into the Arrangement
Agreement, IPL agreed to the Break Fee, the quantum and payment
triggers of which are both excessive and completely unwarranted in
a circumstance where IPL’s special committee chose to accept the
lower-priced and less certain proposal available to IPL
shareholders at the time.
- As a result, IPL’s board has
deprived IPL shareholders of potential additional consideration,
because Brookfield Infrastructure would be forced to accept that a
C$350 million payment will be made to Pembina under the Arrangement
Agreement before we are able to offer any additional consideration
to IPL shareholders.
- If we are successful in the
application, Brookfield Infrastructure will increase its offer to
IPL shareholders in an amount equal to the reduction of the Break
Fee to the degree it is ultimately reduced or eliminated.
Additionally, Brookfield Infrastructure submits
that the IPL Rights Plans have served whatever limited purpose they
originally had. With IPL’s execution of the Arrangement Agreement,
there is no valid purpose for the IPL Rights Plans to continue to
interfere in Brookfield Infrastructure’s rights under the take-over
bid regime in Canada.
Brookfield Infrastructure Reiterates the
Highlights of its Superior Offer
- Cash component of offer totalling
$5.56 billion representing 74% of the total consideration, compared
to zero cash under the Pembina offer.
- Brookfield Infrastructure has
received all regulatory and anti-trust approvals and can close as
early as June 22nd compared to the alternative transaction which is
subject to competition, regulatory and IPL shareholder approvals.
As IPL’s largest shareholder, we remain unsupportive of the
all-share Pembina transaction and intend to vote against it.
- Preserves significant jobs for
IPL’s employees compared to the alternative cost synergy driven
transaction entered into by IPL.
Brookfield Infrastructure believes the choice
for shareholders is clear; waiting six months for a Pembina
transaction that may not occur due to a high degree of uncertainty
surrounding regulatory and shareholder approvals versus the
Brookfield Offer that provides a high degree of certainty, a clean
exit for IPL shareholders and an opportunity to participate in the
growth of a high-quality global infrastructure business.
Details of the Offer
Brookfield Infrastructure encourages IPL
shareholders to read the full details of Brookfield
Infrastructure’s offer (the “Brookfield Offer”)
set forth in the original Offer to Purchase and Circular dated
February 22, 2021 as modified and supplemented by the Notice of
Variation, Change and Extension dated June 4, 2021 (collectively
the “Offer Documents”), which contains the full
terms and conditions of the Brookfield Offer and other important
information as well as detailed instructions on how IPL
shareholders can tender their IPL shares to the Brookfield
Offer.
The Brookfield Offer is open for acceptance
until 5:00 p.m. (Mountain Standard Time) on Tuesday, June 22, 2021
and is not conditional upon the outcome of the
application filed by Brookfield Infrastructure with the ASC.
IPL shareholders who have questions or require
assistance in depositing IPL shares to the Offer, IPL shareholders
should contact the Information Agent and Depositary, Laurel Hill
Advisory Group, by telephone at 1-877-452-7184 (North American Toll
Free Number) or 416-304-0211 (outside North America) or by email at
assistance@laurelhill.com.
Copies of the Offer Documents are available
without charge on request from the Information Agent and are
available at www.ipl-offer.com or on SEDAR at www.sedar.com.
Advisors
Brookfield Infrastructure has engaged BMO
Capital Markets and Barclays Capital Canada Inc. to act as joint
financial advisors and McCarthy Tétrault LLP to act as its legal
advisor in connection with the Offer. Laurel Hill Advisory Group
has also been engaged to act as Brookfield Infrastructure’s
strategic communications advisor and information agent.
Brookfield Infrastructure is a
leading global infrastructure company that owns and operates
high-quality, long-life assets in the utilities, transport,
midstream and data sectors across North and South America, Asia
Pacific and Europe. We are focused on assets that have contracted
and regulated revenues that generate predictable and stable cash
flows. Investors can access its portfolio either through Brookfield
Infrastructure Partners L.P. (NYSE: BIP; TSX: BIP.UN), a
Bermuda-based limited partnership, or Brookfield Infrastructure
Corporation (NYSE, TSX: BIPC), a Canadian corporation. Further
information is available at www.brookfield.com/infrastructure.
Brookfield Infrastructure Partners is the
flagship listed infrastructure company of Brookfield Asset
Management, a global alternative asset manager with over US$600
billion of assets under management. For more information, go to
www.brookfield.com.
No Offer or SolicitationThis
news release is for informational purposes only and does not
constitute an offer to buy or sell, or a solicitation of an offer
to sell or buy, any securities. The offer to acquire IPL securities
and to issue securities of Brookfield Infrastructure Corporation
will be made solely by, and subject to the terms and conditions set
out in the formal offer to purchase and bid circular and
accompanying letter of transmittal and notice of guaranteed
delivery.
NOTICE TO U.S. HOLDERS OF IPL
SHARES
In connection with the Brookfield Offer,
Brookfield Infrastructure has filed a Registration Statement on
Form F-4, Amendment No. 1 and Amendment No. 2 thereto with the
United States Securities and Exchange Commission (the “SEC”) under
the U.S. Securities Act of 1933, as amended, which contain a
prospectus relating to the Brookfield Offer. SHAREHOLDERS AND OTHER
INTERESTED PARTIES INVESTORS AND SHAREHOLDERS OF IPL ARE URGED TO
READ SUCH REGISTRATION STATEMENT, AS AMENDED, AND ANY AND ALL OTHER
RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION
WITH THE BROOKFIELD OFFER, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS
TO ANY SUCH DOCUMENTS, AS EACH BECOMES AVAILABLE, BECAUSE EACH
CONTAINS OR WILL CONTAIN IMPORTANT INFORMATION
ABOUT BROOKFIELD INFRASTRUCTURE, IPL AND THE BROOKFIELD
OFFER. Materials filed with the SEC will be available
electronically without charge at the SEC’s website (www.sec.gov)
under the issuer profiles for BIP and BIPC, or on request without
charge from Brookfield Infrastructure, at 250 Vesey Street, 15th
Floor, New York, New York, 10281-1023 or by telephone at (212)
417-7000 and the materials will be posted on BIP’s
website at www.brookfield.com/infrastructure.
BIP and BIPC are foreign private issuers
and Brookfield Infrastructure is permitted to prepare the offer to
purchase and related documents in accordance with Canadian
disclosure requirements, which are different from those of the
United States. BIP and BIPC prepare their financial statements in
accordance with IFRS, and they may not be directly comparable to
financial statements of United States companies.
Shareholders of IPL should be aware that
the disposition of their common shares and the acquisition and
ownership of BIPC Shares may subject them to tax consequences both
in the United States and in Canada. The offer to purchase may not
describe these tax consequences fully. IPL shareholders should read
any tax discussion in the offer to purchase, and holders of IPL
Shares are urged to consult their tax advisors.
An IPL shareholder’s ability to enforce
civil liabilities under the United States federal securities laws
may be affected adversely by the fact that each of the offeror,
BIP, BIPC and IPL is formed under the laws of a non-U.S.
jurisdiction, that some or all of their respective officers and
directors and some or all of the experts named in the offering
documents may reside outside of the United States, and that all or
a substantial portion of the assets of the offeror, BIP, BIPC, IPL
and such persons may be located outside the United States. IPL
shareholders in the United States may not be able to sue the
offeror, BIP, BIPC or IPL or their respective officers or directors
in a non-U.S. court for violation of United States federal
securities laws. It may be difficult to compel such parties to
subject themselves to the jurisdiction of a court in the United
States or to enforce a judgment obtained from a court of the United
States.
NEITHER THE SECURITIES AND EXCHANGE
COMMISSION NOR ANY STATE SECURITIES REGULATOR HAS OR WILL HAVE
APPROVED OR DISAPPROVED THE BIPC SHARES OFFERED IN THE OFFERING
DOCUMENTS, OR HAS OR WILL HAVE DETERMINED IF ANY OFFERING DOCUMENTS
ARE TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
IPL shareholders should be aware that,
during the period of the Offer, Brookfield Infrastructure or its
affiliates and any advisor, broker or other person acting as the
agent for, or on behalf of, or in concert with the Offeror or its
affiliates, directly or indirectly, may bid for or make purchases
of the securities to be distributed or to be exchanged, or certain
related securities outside the Offer,
including purchases in the open market at prevailing prices
or in private transactions at negotiated prices, as permitted by
applicable laws or regulations of the United States, Canada or its
provinces or territories. To the extent information about such
purchases is made public in Canada, such information will be
disclosed by means of a press release or other means reasonably
calculated to inform IPL shareholders in the United States of such
information.
The Brookfield Offer is being made for
the securities of a Canadian company that does not have securities
registered under Section 12 of the U.S. Exchange Act of 1934, as
amended (the “U.S. Exchange Act”). Accordingly, the Brookfield
Offer is not subject to Section 14(d) of the U.S. Exchange Act, or
Regulation 14D promulgated by the SEC thereunder, except for any
requirements thereunder applicable to exchange offers commenced
before the effectiveness of the related registration statement. The
Brookfield Offer is being conducted in accordance with Section
14(e) of the U.S. Exchange Act and Regulation 14E promulgated
thereunder.
Cautionary Statement Regarding
Forward-looking Statements
This news release may contain forward-looking
information within the meaning of Canadian provincial securities
laws and “forward-looking statements” within the meaning of Section
27A of the U.S. Securities Act of 1933, as amended, Section 21E of
the U.S. Securities Exchange Act of 1934, as amended, “safe harbor”
provisions of the United States Private Securities Litigation
Reform Act of 1995 and in any applicable Canadian securities
regulations. The words “believe”, “expect”, “will” derivatives
thereof and other expressions which are predictions of or indicate
future events, trends or prospects and which do not relate to
historical matters, identify the above mentioned and other
forward-looking statements. Forward-looking statements in this news
release include statements regarding the ASC’s hearing of complaint
filed by Brookfield Infrastructure; statements relating to the
Pembina transaction, including the timing and conditions to closing
and cost synergies; the Brookfield Offer, including the anticipated
timing of closing; the intention to increase the Brookfield Offer
in certain circumstance; and statements regarding Brookfield
Infrastructure’s purchase of IPL shares on the TSX.
Although Brookfield Infrastructure believes that
these forward-looking statements and information are based upon
reasonable assumptions and expectations, the reader should not
place undue reliance on them, or any other forward-looking
statements or information in this news release. The actual outcome
of future events could differ from the forward-looking statements
and information herein, which are subject to a number of known and
unknown risks and uncertainties. Factors that could cause actual
events to differ materially from those contemplated or implied by
the statements in this news release include the ability to obtain
regulatory approvals (including approval of the TSX and the NYSE)
and meet other closing conditions to any possible transaction, the
ability to realize financial, operational and other benefits from
the proposed transaction, general economic conditions in the
jurisdictions in which we operate and elsewhere which may impact
the markets for our products and services, the impact of market
conditions on our businesses, the fact that success of Brookfield
Infrastructure is dependent on market demand for an infrastructure
company, which is unknown, the availability of equity and debt
financing for Brookfield Infrastructure, the ability to effectively
complete transactions in the competitive infrastructure space and
to integrate acquisitions into existing operations, changes in
technology which have the potential to disrupt the business and
industries in which we invest, the market conditions of key
commodities, the price, supply or demand for which can have a
significant impact upon the financial and operating performance of
our business and other risks and factors described in other
documents filed by Brookfield Infrastructure with the securities
regulators in Canada and the United States. Except as required by
law, Brookfield Infrastructure undertakes no obligation to publicly
update or revise any forward-looking statements or information,
whether as a result of new information, future events or
otherwise.For more information, please
contact:
Media:Claire HollandSenior Vice President,
CommunicationsTel: (416) 369-8236 Email:
claire.holland@brookfield.com |
Investors:Kate WhiteManager, Investor Relations
Tel: (416) 956-5183Email: kate.white@brookfield.com |
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