CALGARY, AB, July 27, 2021 /CNW/ - Inter Pipeline Ltd. ("Inter
Pipeline" or the "Company") (TSX: IPL) today announced that its
Board of Directors ("Board") is recommending acceptance of the
revised takeover offer filed on July 19,
2021 (the "Revised Brookfield Offer") from an affiliate of
Brookfield Infrastructure Partners L.P. ("Brookfield") in
light of the termination of the Pembina Arrangement (defined
below).
The recommendation follows consultation with legal and financial
advisors and a recommendation of the special committee of
independent directors of the Board (the "Special Committee").
Under the Revised Brookfield Offer, each Inter Pipeline
shareholder will have the ability to elect to receive, per Inter
Pipeline share, $20.00 in cash or
0.25 of a Brookfield Infrastructure Corporation class A
exchangeable subordinate voting share ("BIPC Share"), or, solely in
the case of eligible Canadian Inter Pipeline shareholders seeking a
rollover for tax purposes, 0.250 of an exchangeable security (each
an "Exchangeable Unit") to be issued by an indirect subsidiary of
Brookfield ("Exchange LP"),
subject to proration in respect of the BIPC Shares and Exchangeable
Units.
This reflects a significant improvement compared with
Brookfield's June 2, 2021 offer of either $19.50 in cash or 0.225 of a BIPC Share for each
Inter Pipeline share, and especially compared with Brookfield's original offer announced
February 10, 2021 of either
$16.50 in cash or 0.206 of a BIPC
Share for each Inter Pipeline share. Both of the earlier
Brookfield offers were subject to
proration in respect of both cash and BIPC Shares.
"To maximize shareholder value we ran a fair and comprehensive
strategic review and as a result Brookfield increased its offer by
approximately 21 percent," said Margaret
McKenzie, Chair of the Board and the Special Committee.
"After thoroughly considering the alternatives, the Board has
concluded that the value and flexibility inherent in the Revised
Brookfield Offer, including the significant cash component of the
offer and the option for a potential tax-deferred rollover for
certain Canadian shareholders, makes it appropriate to recommend
acceptance of the Revised Brookfield Offer to our
shareholders."
As previously disclosed, on May 31,
2021, Inter Pipeline entered into an agreement (the
"Arrangement Agreement") for a combination with Pembina Pipeline
Corporation ("Pembina"), whereby Pembina agreed to exchange 0.5 of
a Pembina common share for each issued and outstanding Inter
Pipeline share (the "Pembina Arrangement"). Subsequent to the
filing of the Revised Brookfield Offer, and after carefully
evaluating the Revised Brookfield Offer, Inter Pipeline advised
Pembina that the Board would not be reconfirming its recommendation
of the Pembina Arrangement, and Pembina terminated the Pembina
Arrangement effective July 25, 2021.
It was apparent at the time of termination that the Pembina
Arrangement was not garnering the requisite support of voting Inter
Pipeline shareholders and the special resolution to approve the
arrangement would not have passed at the upcoming shareholder
meeting.
Inter Pipeline has not entered into any agreement with
Brookfield to formally support the
Revised Brookfield Offer or to make or maintain the Board's
recommendation, nor has Brookfield
requested that Inter Pipeline enter into a support agreement at
this time. Inter Pipeline intends to file on SEDAR and mail to its
shareholders a second notice of change to its Directors' Circular
confirming the Board's recommendation that shareholders accept the
Revised Brookfield Offer, which notice of change will contain
additional information for shareholders to consider in making their
decision whether or not to tender to the Revised Brookfield
Offer.
For information as to the steps necessary to accept the Revised
Brookfield Offer, shareholders should refer to Brookfield's Offer to Purchase and Bid
Circular originally dated February 22,
2021 as amended by notices of variation dated June 4, 2021, June 21,
2021, July 13, 2021 and
July 19, 2021 (collectively, the
"Amended Brookfield Circular"). Shareholders who are considering
electing to receive BIPC Shares as all or part of the consideration
for their shares of Inter Pipeline or who are considering utilizing
the tax deferred option available to certain eligible Canadian
shareholders under the Revised Brookfield Offer should review the
Amended Brookfield Circular and consult their investment dealer,
stockbroker, lawyer or other professional advisors regarding, among
other things, the investment attributes of the BIPC Shares and the
tax consequences of any such election in their individual
circumstances.
Inter Pipeline shareholders who have questions or require
assistance in depositing their shares to the Revised Brookfield
Offer should contact Brookfield's
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. The
Revised Brookfield Offer is open for acceptance until 5:00 p.m. (MT) on August
6, 2021.
Financial and Legal Advisors
Inter Pipeline has retained TD Securities Inc. and the Special
Committee has retained J.P. Morgan Securities Canada Inc. as
financial advisors. Burnet, Duckworth & Palmer LLP and Dentons
Canada LLP are acting as legal advisors to Inter Pipeline and its
Board of Directors.
About Inter Pipeline Ltd.
Inter Pipeline is a major petroleum transportation and natural
gas liquids processing business based in Calgary, Alberta, Canada. Inter Pipeline owns
and operates energy infrastructure assets in Western Canada and is building the Heartland
Petrochemical Complex — North
America's first integrated propane dehydrogenation and
polypropylene facility. Inter Pipeline is a member of the
S&P/TSX 60 Index and its common shares trade on the Toronto
Stock Exchange under the symbol IPL.
www.interpipeline.com
Contact Information
Investor Relations:
Jeremy
Roberge
Vice President, Finance and Investor Relations
Email: investorrelations@interpipeline.com
Tel: 403-290-6015 or 1-866-716-7473
Media Relations:
Breanne Oliver
Corporate Spokesperson
Email: mediarelations@interpipeline.com
Tel: 587-475-1118 or 1-866-716-7473
Disclaimer
Certain information contained herein may constitute
forward-looking statements that involve risks and uncertainties.
Readers are cautioned not to place undue reliance on
forward-looking statements, including, but not limited to,
statements regarding the Revised Brookfield Offer. Such
information, although considered reasonable by Inter Pipeline at
the time of preparation, may later prove to be incorrect and actual
results may differ materially from those anticipated in the
statements made. For this purpose, any statements that are not
statements of historical fact are deemed to be forward-looking
statements. Forward-looking statements often contain terms such as
"may", "will", "should", "anticipate", "expects" and similar
expressions. Such risks and uncertainties include, but are not
limited to, risks associated with operations, such as loss of
markets, regulatory matters, environmental risks, industry
competition, potential delays and cost overruns of construction
projects, and the ability to access sufficient capital from
internal and external sources. You can find a discussion of those
risks and uncertainties in Inter Pipeline's securities filings at
www.sedar.com. The forward-looking statements contained in this
news release are made as of the date of this news release, and,
except to the extent required by applicable law, Inter Pipeline
assumes no obligation to update or revise forward-looking
statements made herein or otherwise, whether as a result of new
information, future events, or otherwise. The forward-looking
statements contained in this news release are expressly qualified
by this cautionary note. All dollar values are expressed in
Canadian dollars unless otherwise noted.
SOURCE Inter Pipeline Ltd.