TC PipeLines, LP (NYSE: TCP) (TCP or the Partnership) today
announced it has entered into a definitive agreement and plan of
merger pursuant to which TC Energy Corporation (TSX, NYSE: TRP) (TC
Energy) will acquire all the outstanding common units of TCP not
beneficially owned by TC Energy or its affiliates in exchange for
TC Energy common shares. Pursuant to the agreement, TCP common
unitholders would receive 0.70 common shares of TC Energy for each
issued and outstanding publicly-held TCP common unit. This
represents a 19.5 per cent premium to the TCP closing price before
the original offer as of October 2, 2020.
The conflicts committee, composed of independent
directors of the Partnership’s general partner, after consultation
with its independent legal and financial advisors, unanimously
approved the merger agreement and determined it to be in the best
interests of the Partnership and its unaffiliated unitholders.
Subsequently, the board of directors of the Partnership’s general
partner approved the merger agreement and determined it to be fair
and reasonable and in the best interests of the Partnership.
The transaction is expected to close late in the
first quarter or early in the second quarter of 2021 subject to the
approval by the holders of a majority of outstanding common units
of TCP and customary regulatory approvals. Upon closing, TCP will
be wholly-owned by TC Energy and will cease to be a publicly-held
master limited partnership.
The exchange ratio reflects a value for all the
publicly-held common units of TCP of approximately US$1.68 billion,
or 38 million TC Energy common shares based on the closing price of
TC Energy’s common shares on the New York Stock Exchange on
December 14, 2020.
Evercore is acting as exclusive financial
advisor and Kirkland & Ellis LLP is acting as legal advisor to
the conflicts committee.
About TC PipeLines, LP
TC PipeLines, LP is a Delaware master limited
partnership with interests in eight federally regulated U.S.
interstate natural gas pipelines which serve markets in the
Western, Midwestern and Northeastern United States. The Partnership
is managed by its general partner, TC PipeLines GP, Inc., a
subsidiary of TC Energy Corporation (NYSE: TRP). For more
information about TC PipeLines, LP, visit the Partnership’s website
at www.tcpipelineslp.com.
Important Additional
Information
This communication does not constitute an offer
to sell or the solicitation of an offer to buy any securities or a
solicitation of any vote or approval, nor shall there be any sale
of securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended. In connection with the potential transaction, TC Energy
expects to file a registration statement on Form F-4 with the
Securities and Exchange Commission (“SEC”) containing a preliminary
prospectus of TC Energy that also constitutes a preliminary proxy
statement of TCP. After the registration statement is declared
effective, TCP will mail a definitive proxy statement/prospectus to
unitholders of TCP. This communication is not a substitute for the
proxy statement/prospectus or registration statement or for any
other document that TC Energy or TCP may file with the SEC and send
to TCP’s unitholders in connection with the potential transaction.
INVESTORS AND SECURITY HOLDERS OF TC ENERGY AND TCP ARE URGED TO
READ THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH
THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and
security holders will be able to obtain free copies of the proxy
statement/prospectus (when available) and other documents filed
with the SEC by TC Energy or TCP through the website maintained by
the SEC at http://www.sec.gov. Copies of the documents filed with
the SEC by TC Energy will be available free of charge on TC
Energy’s website at
https://www.tcenergy.com/investors/reports-and-filings/and copies
of the documents filed with the SEC by TCP will be available free
of charge on TCP’s website at
https://www.tcpipelineslp.com/investors/reports-and-filings/.
TC Energy and TCP and certain of their
respective directors, certain of their respective executive
officers and other members of management and employees may be
considered participants in the solicitation of proxies with respect
to the potential transaction under the rules of the SEC.
Information about the directors and executive officers of TC Energy
is set forth in its Management Information Circular, dated February
27, 2020, which was filed as Exhibit 99.1 to TC Energy’s Current
Report on Form 6-K, filed with the SEC on March 16, 2020.
Information about the directors and executive officers of TCP is
set forth in its Annual Report on Form 10-K for the year ended
December 31, 2019, which was filed with the SEC on February 20,
2020, and its Current Report on Form 8-K, filed with the SEC on
September 17, 2020. These documents can be obtained free of charge
from the sources indicated above. Additional information regarding
the interests of such participants in the solicitation of proxies
in respect of the potential transaction will be included in the
registration statement and proxy statement/prospectus and other
relevant materials to be filed with the SEC when they become
available.
Forward-Looking Statements and Cautionary
Statements
This communication contains forward-looking
statements. These forward-looking statements generally include
statements regarding the potential transaction between TC Energy
and TCP, including any statements regarding the expected timetable
for completing the potential transaction, the ability to complete
the potential transaction, the expected benefits of the potential
transaction, projected financial information, future opportunities,
and any other statements regarding TC Energy’s and TCP’s future
expectations, beliefs, plans, objectives, results of operations,
financial condition and cash flows, or future events or
performance. These statements are often, but not always, made
through the use of words or phrases such as “anticipates,”
“expects,” “intends,” “plans,” “targets,” “forecasts,” “projects,”
“believes,” “seeks,” “schedules,” “estimates,” “positions,”
“pursues,” “may,” “could,” “should,” “will,” “budgets,” “outlook,”
“trends,” “guidance,” “focus,” “on schedule,” “on track,” “is
slated,” “goals,” “objectives,” “strategies,” “opportunities,”
“poised,” “potential” and similar expressions. All such
forward-looking statements are based on current expectations of TC
Energy’s and TCP’s management and therefore involve estimates and
assumptions that are subject to risks, uncertainties and other
factors that could cause actual results to differ materially from
the results expressed in the statements. Key factors that could
cause actual results to differ materially from those projected in
the forward-looking statements include the ability to obtain the
requisite Partnership unitholder approval; uncertainties as to the
timing to consummate the potential transaction; the risk that a
condition to closing the potential transaction may not be
satisfied; the risk that regulatory approvals are not obtained or
are obtained subject to conditions that are not anticipated by the
parties; the effects of disruption to TC Energy’s or TCP’s
respective businesses; the effect of this communication on the
price of TC Energy’s common shares or TCP’s common units; the
effects of industry, market, economic, political or regulatory
conditions outside of TC Energy’s or TCP’s control; transaction
costs; TC Energy’s ability to achieve the benefits from the
proposed transaction; and the diversion of management time on
transaction-related issues. Other important factors that could
cause actual results to differ materially from those in the
forward-looking statements are: the impact of downward changes in
oil and natural gas prices, including any effects on the
creditworthiness of shippers or the availability of natural gas in
a low oil price environment; the impact of litigation and other
opposition proceedings on the ability to begin work on projects and
the potential impact of an ultimate court or administrative ruling
to a project schedule or viability; uncertainty surrounding the
impact of global health crises that reduce commercial and economic
activity, including the recent outbreak of the COVID-19 virus, and
the potential impact on the respective businesses of TC Energy and
TCP; the potential disruption or interruption of operations due to
war, accidents, political events, civil unrest, severe weather,
cyber threats, terrorist acts, or other natural or human causes
beyond the parties’ control; and the potential liability resulting
from pending or future litigation. Other unpredictable or
unknown factors not discussed in this communication could also have
material adverse effects on forward-looking statements. TCP and TCE
assume no obligation to update any forward-looking statements,
except as required by law. Readers are cautioned not to place undue
reliance on these forward-looking statements that speak only as of
the date hereof. Additional factors that could cause results to
differ materially from those described above can be found in TCP’s
most recent Annual Report on Form 10-K, as it may be updated from
time to time by quarterly reports on Form 10-Q and current reports
on Form 8-K all of which are available on TCP’s website at
https://www.tcpipelineslp.com/investors/reports-and-filings/ and on
the SEC’s website at http://www.sec.gov, and in TC Energy’s most
recent Annual Report on Form 40-F, as it may be updated from time
to time by current reports on Form 6-K all of which are available
on TC Energy’s website at
https://www.tcenergy.com/investors/reports-and-filings/ and on the
SEC’s website at http://www.sec.gov.
Media Inquiries:Robin Lee / Hejdi
Carlsen403.920.7859 or 800.608.7859
Unitholder and Analyst Inquiries:Rhonda
Amundson 877.290.2772investor_relations@tcpipelineslp.com
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