The Calgary-headquartered Pembina Pipeline Corp. decided to pull its C$8.5 billion ($6.7 billion) offer to acquire Inter Pipeline Ltd., consequently providing Brookfield Infrastructure Partners LP with a clear path to pursue their own bid. Inter is expected to pay a C$350 million termination fee to Pembina, who in turn will make a recommendation on Brookfield’s offer to shareholders.
In response to this latest development, Inter released the following statement: “Inter Pipeline’s Board of Directors is open to engaging with Brookfield in an effort to reach a mutually agreeable transaction in the best interests of shareholders.”
This is just the latest piece of drama involving Inter in the last several years. Prior to such takeover attempts, Inter had failed on numerous occasions at building major projects alike in size to TC Energy Corp.’s Keystone XL and Energy East. The successful implementation of one such project could have increased the value of those pipelines involved.
As the owner of pipeline infrastructure across Western Canada, Inter specializes in connecting oil and natural gas producers with customers both foreign and domestic. Should Brookfield’s revised offer be accepted investors would receive C$20.00 a share in cash or 0.25 of a Brookfield Infrastructure Corp. share.
