Brookfield Infrastructure Partners last week increased its unsolicited takeover offer for Inter Pipeline Ltd. to about C$8.48 billion ($7.02 billion) in an effort to top an interloping bid by Pembina Pipeline Corp. that has been accepted by Inter Pipeline. Brookfield is now offering a combination of cash and shares that values Inter Pipeline at C$19.75/share; 74% of the offer is cash.
Brookfield hopes to the close the deal within 20 days.
Pembina on June 1 agreed to buy Inter Pipeline in a share-for-share transaction priced at C$8.3 billion (OGJ Online, June 1, 2021). In February 2021, Brookfield had made a hostile-takeover bid valued at C$16.50/share. Inter Pipeline rejected that bid and began looking for other options.
Brookfield, which owns 9.75% of Inter Pipeline’s shares, noted in the wake of Pembina’s bid being accepted that it does not intend to be a long-term investor in Pembina and that its stake would “create a substantial and protracted overhang on Pembina’s shares” should the transaction proceed. Brookfield also said that Pembina’s offer would “require a lengthy timeline to closing, accompanied by uncertainty due to numerous conditions” absent from its offer. Inter Pipeline and Pembina said at the time of reaching their agreement that they expected it to close fourth-quarter 2021, pending regulatory and shareholder approval.
