Offer Highlights
- Revised Offer from Brookfield Infrastructure will include an ability for
Inter Pipeline Ltd. (“IPL”) shareholders to receive a clean exit and value certainty through 100% cash consideration, compared to zero cash consideration in the proposed transaction (the “Alternative Transaction”) with Pembina Pipeline Corporation (“Pembina”). - Revised Offer would provide a superior value proposition for IPL shareholders who may elect up to 100% cash consideration totalling
C$19.50 per share of IPL, without being subject to proration, or 0.225 of a class A exchangeable subordinate voting share of Brookfield Infrastructure Corporation (“BIPC”), valued atC$19.99 per IPL share as of market close onJune 17 th. - Brookfield Infrastructure is prepared to increase the consideration under our Offer by up to
C$0.90 1 per IPL share, i.e., up to an aggregate value ofC$20.40 1 per IPL share, pending the outcome of our challenge before theAlberta Securities Commission (“ASC”) of the inappropriate break fee granted by IPL. - Offer has received all requisite regulatory and anti-trust approvals, is fully funded, executable within three business days of expiry date.
- Offer provides valuation and transaction certainty, a shorter timeline to closing, and immediate liquidity versus 100% share-based Alternative Transaction.
- Offer preserves significant jobs for IPL’s employees compared to the cost synergy focused Alternative Transaction entered into by IPL.
- Brookfield Infrastructure, as IPL’s largest shareholder, will vote against the Alternative Transaction.
BROOKFIELD, NEWS,
1 If Brookfield Infrastructure is successful in its application to the ASC to eliminate or reduce the amount of the Break Fee, it is prepared to further amend its Offer to increase the consideration by such amount.
IPL Shareholders can now Elect to Receive 100% Cash Consideration without Proration
Based on feedback received from institutional and event-driven investors with significant ownership positions in IPL’s common shares, Brookfield Infrastructure is prepared to expand the maximum cash consideration to be paid in the context of its Offer to 100%.
We believe an all-cash option provides superior value and flexibility for IPL shareholders, as well as enhanced certainty and a clean exit for those institutional and event-driven investors with near-term mandates. Conversely, the all-share consideration included in the Alternative Transaction would result in a substantial and protracted overhang on Pembina’s share price given monetization considerations for event-driven funds, select institutional shareholders and Brookfield Infrastructure’s
The revised Offer preserves the ability for eligible shareholders to elect tax deferred BIPC Shares as consideration, which provides access to the long-term growth potential of BIPC’s diversified global infrastructure platform.
With forecast corporate liquidity of over
Brookfield Infrastructure Continues to Challenge IPL’s Inappropriate Defensive Tactics
The ASC has confirmed a hearing date of
Brookfield Infrastructure is prepared to increase the cash consideration of our Offer by the amount of any corresponding reduction in the Break Fee with such resolution anticipated before the expiration of our Offer. In the event the Break Fee is successfully set aside, this would represent an additional
Brookfield Infrastructure Reaffirms the Merits of its Offer
We note IPL’s press release issued
- 100% Cash Consideration Option. Our Offer provides IPL shareholders an ability to elect up to 100% cash consideration, without proration. The value of the Alternative Transaction is dependent on forward-looking outcomes which include the realization of operational synergies that are inherently uncertain and may prove illusory.
- Ability to Maximize the Amount of Tax-Deferred Consideration. Our Offer continues to include the expanded option for eligible shareholders who elect to receive 100% of their consideration in BIPC Shares on a tax-deferred rollover basis, with an ability to maximize the amount of tax-deferred consideration they seek to receive subject to the aggregate limit of 31.0 million BIPC Shares.
- Access to Globally Diversified Infrastructure Platform Focused on Total Returns. Ability, through BIPC, to benefit from continued participation in IPL as part of a globally diversified infrastructure company focused on both dividend growth and generating total return for shareholders. Over the past decade Brookfield Infrastructure has delivered an average of 10% per annum dividend growth and average annual total shareholder returns of 18%.
- Speed to Close. Our Offer is not subject to any regulatory or Court approvals and IPL shareholders will receive their consideration within three business days following the Offer expiry date if our Offer is successful, thus providing IPL shareholders with value certainty and an expeditious closing when compared to the Alternative Transaction. The Alternative Transaction would not be expected to close before Q3 / Q4 2021, implying lost opportunity cost and notably exposure to potentially fluctuating capital markets, commodity and broad business environment factors.
- High Degree of Certainty. Brookfield Infrastructure has received all required regulatory and anti-trust approvals and is committed to close quickly. Conversely, the risk of closing the Alternative Transaction remains high as it is subject to two sets of shareholder approvals, regulatory approval risk and anti-competition uncertainty. Pursuant to the Alternative Transaction’s “hell or high water” provisions, the risk of any punitive regulatory or anti-competition rulings or outcomes will be borne by IPL shareholders due to the proposed all-share consideration.
Details of the Offer
Under the terms and subject to the conditions of our intended Offer, each IPL shareholder can elect to receive, per IPL share, either
For IPL shareholders seeking to participate in the upside from the integration of IPL into a globally diversified infrastructure company, the Offer will continue to include an option to elect to receive BIPC Shares as consideration and an option for eligible shareholders to access a tax deferred rollover in respect of any BIPC Shares received pursuant to the Offer. The maximum BIPC Share consideration remains 23.0 million aggregate shares (representing 26% of the total consideration), with eligible shareholders who elect to receive 100% of their consideration in BIPC Shares on a tax-deferred basis having access to an incremental 8 million BIPC Shares (with such incremental shares priced at the fair market value as of the expiry date of the Offer, in lieu of cash).
We believe this amendment will provide investors with ultimate- flexibility, allowing investors to participate in IPL through shares of BIPC and providing additional value certainty and liquidity to those investors who value a clean exit from the company.
Our Offer, as revised, will be open for acceptance until
Brookfield Infrastructure encourages IPL shareholders to read the full details of the Offer to be set forth in the Second Notice of Variation, which, together with the original Offer to Purchase and Circular dated
IPL shareholders who have questions or require assistance in depositing IPL shares to the Offer, IPL shareholders should contact the Information Agent and Depositary,
Advisors
Brookfield Infrastructure has engaged
Brookfield Infrastructure is a leading global infrastructure company that owns and operates high-quality, long-life assets in the utilities, transport, midstream and data sectors across
No Offer or Solicitation
This news release is for informational purposes only and does not constitute an offer to buy or sell, or a solicitation of an offer to sell or buy, any securities. The offer to acquire IPL securities and to issue securities of Brookfield Infrastructure Corporation will be made solely by, and subject to the terms and conditions set out in the formal offer to purchase and bid circular and accompanying letter of transmittal and notice of guaranteed delivery.
NOTICE TO
Brookfield Infrastructure intends to make the offer and sale of the BIPC Shares in the Offer subject to a registration statement of BIPC and BIP covering such offer and sale to be filed with the
BIPC is a foreign private issuer and Brookfield Infrastructure is permitted to prepare the offer to purchase and takeover bid circular and related documents in accordance with Canadian disclosure requirements, which are different from those of
Shareholders of IPL should be aware that owning BIPC Shares may subject them to tax consequences both in
An IPL shareholder’s ability to enforce civil liabilities under
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATOR HAS OR WILL HAVE APPROVED OR DISAPPROVED THE BIPC SHARES OFFERED IN THE OFFERING DOCUMENTS, OR HAS OR WILL HAVE DETERMINED IF ANY OFFERING DOCUMENTS ARE TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
IPL shareholders should be aware that, during the period of the Offer, Brookfield Infrastructure or its affiliates, directly or indirectly, may bid for or make purchases of the securities to be distributed or to be exchanged, or certain related securities, as permitted by applicable laws or regulations of
Cautionary Statement Regarding Forward-looking Statements
This news release may contain forward-looking information within the meaning of Canadian provincial securities laws and “forward-looking statements” within the meaning of Section 27A of the
Although Brookfield Infrastructure believes that these forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on them, or any other forward-looking statements or information in this news release. The actual outcome of future events could differ from the forward-looking statements and information herein, which are subject to a number of known and unknown risks and uncertainties. Factors that could cause actual events to differ materially from those contemplated or implied by the statements in this news release include the ability to obtain regulatory approvals (including approval of the TSX and the NYSE) and meet other closing conditions to any possible transaction, the ability to realize financial, operational and other benefits from the proposed transaction, general economic conditions in the jurisdictions in which we operate and elsewhere which may impact the markets for our products and services, the impact of market conditions on our businesses, the fact that success of Brookfield Infrastructure is dependent on market demand for an infrastructure company, which is unknown, the availability of equity and debt financing for Brookfield Infrastructure, the ability to effectively complete transactions in the competitive infrastructure space and to integrate acquisitions into existing operations, changes in technology which have the potential to disrupt the business and industries in which we invest, the market conditions of key commodities, the price, supply or demand for which can have a significant impact upon the financial and operating performance of our business and other risks and factors described in other documents filed by Brookfield Infrastructure with the securities regulators in
For more information, please contact:
| Media: Senior Vice President, Communications Tel: (416) 369-8236 Email: [email protected] | Investors: Manager, Investor Relations Tel: (416) 956-5183 Email: [email protected] |
| Shareholder Questions / Tendering Assistance: North American Toll-Free: 1-877-452-7184 (+1-416-304-0211 outside Email: [email protected] | |
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