Inter Pipeline Ltd. (TSX: IPL) announced this morning that it is dropping the arrangement agreement it signed with Pembina Pipeline Corp. (TSX: PPL) and will no longer be recommending shareholders vote in favor of the proposed transaction.
The agreement, entered into by the company on May 31, 2021, stipulates Pembina Pipeline acquiring all issued and outstanding Inter Pipeline common shares. Each Inter Pipeline common share held would have been exchanged for half of a Pembina Pipeline common share.
However, the Alberta-based petroleum firm received a revised acquisition offer from an affiliate of Brookfield Infrastructure Partners (TSX: BIP.UN) on July 19, 2021. The new agreement posits acquiring each Inter Pipeline common share for either $20.00 cash or 0.25 of a Brookfield Infrastructure Corporation (TSX: BIPC) class A exchangeable subordinate voting share.
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For comparison, Pembina Pipeline last traded at $39.40 while Brookfield Infrastructure last traded at $87.77 at the TSX. Pembina’s offer would have equated to $14.70 compared to Brookfield’s share-based offer of $21.94 for each Inter Pipeline common share held.
Inter Pipeline has relayed that its board is opening its doors for negotiation with Brookfield and is expected to announce a formal recommendation in due time.
Following Inter Pipeline’s announcement, Pembina Pipeline terminated the arrangement agreement with the company. The termination comes with a $350.0 million fee payable by Inter Pipeline.
Inter Pipeline last traded at $20.22 on the TSX.
Information for this briefing was found via Sedar and Inter Pipeline. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
