Filing of Certain Prospectuses and Communications in Connection With Business Combination Transactions (425)
July 19 2021 - 4:58PM
Edgar (US Regulatory)
Filed by: Brookfield Infrastructure
Corporation
(Commission File No. 001-39250)
and
Brookfield
Infrastructure Partners L.P.
(Commission File No. 001-33632)
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Inter Pipeline Ltd.
Tender to Brookfield Infrastructure’s Superior Offer
Vote AGAINST the Alternative
Transaction
July 19, 2021
Dear fellow IPL
shareholders:
Brookfield Infrastructure Partners L.P., together with its institutional partners (collectively, “Brookfield
Infrastructure”), is pleased to present you with an increased offer (the “Offer”) to acquire all of the outstanding common shares of Inter Pipeline Ltd. (TSX:IPL) (“IPL”). In order to receive the compelling consideration
under the Offer, IPL shareholders are urged to vote AGAINST IPL’s proposed transaction (the “Alternative Transaction”) with Pembina Pipeline Corporation (“Pembina”).
Details of the Offer
Each IPL
shareholder will have the ability to elect to receive, per IPL share:
|
|
●
|
|
Up to 100% cash consideration totalling C$20.00 per share of IPL without being subject to proration; or
|
|
|
●
|
|
0.250 of a Brookfield Infrastructure Corporation (NYSE: BIPC; TSX: BIPC) class A exchangeable subordinated voting share
(“BIPC Share”) subject to proration, valued at C$23.85 per IPL share as of market close on July 14, 2021.
|
IPL
Shareholders do not have to elect all cash or all shares and can instead, elect the consideration split which best suits their objectives (subject to the BIPC Share proration). For further details, IPL shareholders are encouraged to read the
enclosed fourth notice of variation and change (the “Fourth Notice of Variation”).
Reasons to Accept the Offer
|
|
✓
|
Superior Value. Brookfield Infrastructure’s Offer to purchase IPL for C$21.23 per IPL common share1, on a prorated basis, represents a premium of C$1.53 or 8% to the Alternative Transaction2.
|
|
|
✓
|
Value Certainty and Flexibility of Consideration. IPL shareholders have the ability to elect the form of
consideration according to their individual preferences.
|
|
1
|
Based on assumed proration of 32% BIPC Shares and 68% cash and based on the closing price of the BIPC Shares on the TSX
on July 14, 2021.
|
|
2
|
Based on the closing price of the Pembina common shares on the TSX on July 14, 2021.
|
|
|
✓
|
Speed to Close and Immediate Liquidity. Brookfield Infrastructure has received all key regulatory approvals and
can take up and pay for tendered shares within three business days after the Offer expiry time.
|
|
|
✓
|
Tax Deferred Consideration. Eligible shareholders can elect a tax deferred rollover into BIPC Shares through
the Offer.
|
|
|
✓
|
Superior Share Consideration. Brookfield Infrastructure share consideration provides a more attractive total
return opportunity for IPL shareholders. We are proud of our average annual total return of 19% over a 10-year period, which has significantly outperformed Pembina’s total return of 10% over the same
period. Additionally, since 2009, Brookfield Infrastructure has delivered superior dividend growth to its shareholders with an annual growth rate of 10%, compared to Pembina’s growth rate of 4% over the same period.
|
|
|
✓
|
Best-in-class Infrastructure
Portfolio. Our platform offers the unique advantage of being able to invest across four key infrastructure sectors, at all points within economic cycles, and across multiple geographies to secure the best risk adjusted returns for our investors.
|
|
|
✓
|
Stable and Growing Cash Flows. 95% of Brookfield Infrastructure’s revenue is underpinned by regulated and
contractual frameworks driving predictable and growing cash flows.
|
|
|
✓
|
Strong Growth Pipeline. We have a strong growth outlook through a combination of organic revenue growth and new
investment activity.
|
Reasons to Vote Against the Alternative Transaction
|
|
×
|
The Alternative Transaction Represents Lower Value for Shareholders. Based on the current and historical market
prices, the Alternative Transaction delivers inferior value to IPL shareholders when compared to Brookfield Infrastructure’s superior Offer.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brookfield Infrastructure Offer1
|
|
Alternative Transaction2
|
|
Brookfield Offer Premium to
Alternative Transaction
|
|
|
|
|
|
|
|
July 14, 2021
|
|
$21.23
|
|
$19.70
|
|
$1.53
|
|
7.8%
|
|
|
|
|
|
|
|
30-Day VWAP
|
|
$20.82
|
|
$19.84
|
|
$0.98
|
|
4.9%
|
|
|
|
|
|
|
|
60-Day VWAP
|
|
$20.70
|
|
$19.51
|
|
$1.19
|
|
6.1%
|
|
|
|
|
|
|
|
90-Day VWAP
|
|
$20.78
|
|
$19.11
|
|
$1.67
|
|
8.7%
|
|
|
|
(1) Assumes that IPL shareholders select the higher value BIPC Shares resulting in 68% cash and 32% share proration and
based on the closing price of the BIPC Shares on the TSX on July 14, 2021.
|
|
(2) Based on the closing price of the Pembina common shares on the TSX on July 14, 2021
|
|
|
×
|
Zero Cash Consideration: The Alternative Transaction offers zero cash consideration and therefore no access to
immediate liquidity or value certainty for those who would otherwise seek an exit.
|
|
|
×
|
Long and Uncertain Timeline to Closing. The Alternative Transaction requires shareholders and regulatory
approvals that are yet to be received, exposing IPL shareholders to uncertainty in respect of potential customer complaints and consequently possible anti-trust approvals that are delayed or denied entirely. Pursuant to the Alternative
Transaction’s “hell or high water”
|
|
|
provisions, the risk of any punitive regulatory or anti-competition rulings or outcomes will be borne by IPL
shareholders due to the proposed all-share consideration.
|
|
|
×
|
Potential for Overhang and Downward Price Pressure on the Share-Based Consideration: IPL shareholders may
experience prolonged downward pressure on Pembina’s share price as short-term shareholders seek to monetize their shareholding via selling shares in the public market.
|
|
|
×
|
IPL Employees. Pembina has publicly indicated ~$150 million of general, administrative and operational
synergies, which we fear would inevitably result in significant job losses for local IPL employees.
|
Voting AGAINST the
Alternative Transaction is reinforced by a leading independent proxy advisor, Institutional Shareholder Services (“ISS”). On July 16, 2021, ISS recommended IPL Shareholders vote AGAINST the Alternative Transaction citing:
“the combination with PPL carries execution risk and shareholders have also been offered a higher competing bid from BIP which
has financing certainty, no regulatory risk, and an all-cash option. Absent an improvement of terms from PPL, shareholders appear to be better off with the riskless option from BIP’s
deal. As such, shareholders are recommended to vote against this proposal based on the current terms” – ISS, July 16, 2021
IPL Shareholders are urged to cast their vote AGAINST well in advance of
IPL’s July 27, 2021 proxy voting deadline.
Tender to Brookfield Infrastructure’s Offer which is open for acceptance until
5:00 p.m. (Mountain Time) on Friday, August 6, 2021.
IPL shareholders who have questions or require assistance may contact Laurel Hill Advisory Group toll free at 1-877-452-7184 (416-304-0211 outside North America), or by email at
assistance@laurelhill.com.
Sincerely Yours,
Brookfield
Infrastructure
Additional Information Regarding Proxy Solicitation
Brookfield Infrastructure is soliciting proxies pursuant to an order of the Alberta Securities Commission dated June 29, 2021 allowing
Brookfield Infrastructure to solicit proxies through public broadcast without Brookfield Infrastructure filing a proxy circular. Brookfield Infrastructure is soliciting proxies in respect of IPL and the annual general and special meeting of
shareholders of IPL to be held on July 29, 2021 (the “IPL Meeting”). IPL’s head office is located at Suite 3200, 215—2nd Street SW, Calgary, Alberta, T2P 1M4.
Brookfield Infrastructure has engaged Laurel Hill Advisory Group as their strategic advisor and proxy solicitation agent to assist Brookfield
Infrastructure in the solicitation of proxies from IPL shareholders for the IPL Meeting. The total cost of these proxy solicitation services is up to approximately $100,000, plus reasonable out of-pocket
expenses. Brookfield Infrastructure will bear the costs of this solicitation.
In addition to revocation in any other manner permitted by
law, a registered IPL shareholder may revoke or change a previously made proxy vote: (a) by accessing the IPL Meeting by following the instructions under the heading “How to Participate at the IPL Shareholders’ Meeting” in the
Joint Information Circular of IPL and Pembina dated June 29, 2021 in respect of the IPL Meeting and voting their IPL shares during the designated time; (b) by an instrument in writing executed by the IPL shareholder or such IPL
shareholder’s attorney authorized in writing or, if the IPL shareholder is a corporation, under its corporate seal or by an officer or attorney thereof, duly authorized, indicating the capacity under which such officer or attorney is signing
and deposited with Computershare, the transfer agent of IPL, at the office designated in the Notice of Special Meeting of IPL Shareholders dated June 29, 2021 not later than 10:00 a.m. (Calgary time), on the business day preceding the day of
the IPL Meeting (or any adjournment or postponement thereof); or (c) by a duly executed and deposited proxy as provided herein bearing a later date or time than the date or time of the proxy being revoked. IPL shareholders who hold their shares
through a bank, broker or other intermediary are encouraged to follow the instructions provided to them from their applicable intermediary as they differ from those of registered shareholders (shareholders who hold IPL shares in their own name).
Alternatively, IPL shareholders may contact Laurel Hill for assistance.
Brookfield Infrastructure beneficially own and exercise control or
direction over 41,848,857 IPL shares. Additionally, Brookfield Infrastructure has economic exposure to an aggregate of 42,492,698 IPL shares pursuant to a cash-settled total return swap. The cash-settled total return swap affords economic exposure
to IPL shares, but does not give Brookfield Infrastructure any right to vote, or direct or influence the voting, acquisition, or disposition of any IPL shares.
Brookfield Infrastructur... (NYSE:BIP)
Historical Stock Chart
From May 2024 to Jun 2024
Brookfield Infrastructur... (NYSE:BIP)
Historical Stock Chart
From Jun 2023 to Jun 2024
