The infrastructure company is willing to sweeten its offer if given access to due diligence of the Canadian pipeline operator
Brookfield Infrastructure Partners has offered to acquire full ownership of Canadian pipeline transport company Inter Pipeline (IPL) in a deal valued at CAD13.5bn ($10.65bn).
The infrastructure company alongside its institutional partners has made an offer to acquire the remaining shares it did not own previously in the midstream company for CAD16.5 ($13) per share.
Currently, Brookfield Infrastructure holds a stake of around 19.65% in Inter Pipeline, which makes it the single largest investor in the latter.
Based in Calgary, Alberta, Canada, Inter Pipeline is a major petroleum transportation and natural gas liquids processing business.
The company owns and operates energy infrastructure assets in western Canada and is constructing the Heartland Petrochemical Complex, an integrated propane dehydrogenation and polypropylene facility.
The offer is aimed at privatising Inter Pipeline, which is a public-listed company trading on the Toronto Stock Exchange (TSX).
As per the terms of the offer, Inter Pipeline’s shareholders will have the option to get paid CAD16.5 ($13.01) in cash per share or take 0.206 of a Brookfield Infrastructure Corporation (BIPC) class A exchangeable share for each of the shares held in the pipeline firm.
Brookfield Infrastructure said that the offer is fully financed and has a maximum cash consideration of around CAD4.9bn and a maximum number of around 19 million BIPC shares.
The company stated: “Brookfield Infrastructure firmly believes that its Offer is in the best interests of all IPL shareholders and that shareholders should have the opportunity to determine what is best for their investment.”
Brookfield Infrastructure said that it aims to get access to confirmatory due diligence to support a valuation for the latter above its present offer. In this connection, Brookfield Infrastructure will look to increase the offer in the range of CAD17 ($13.41) and CAD18.25 ($14.39) per share.
In late 2020, Inter Pipeline announced a deal to acquire the Milk River pipeline system in Canada from Plains All American Pipeline in an asset swap deal.