CALGARY, AB – Inter Pipeline Ltd. (“Inter Pipeline” or the “Company”) (TSX: IPL) reiterates that the focus of its previously announced strategic review process (the “Strategic Review”) is to seek opportunities to maximize value for all shareholders. This is consistent with the fiduciary obligations of the Inter Pipeline Board of Directors (the “Board”) and in the best interests of shareholders. The Strategic Review is being led by the Special Committee of independent directors, supported by independent financial and legal advisors.
Strategic Review Status
Inter Pipeline continues to positively progress the Strategic Review and is in active discussions with third parties regarding alternatives to maximize shareholder value. It is important to note that Inter Pipeline has signed non-disclosure agreements with parties in its process, a customary practice that prevents Inter Pipeline from currently disclosing the status of discussions. The Special Committee intends to update shareholders on the results of the Strategic Review prior to the expiry of Brookfield Infrastructure Partners L.P.’s (“Brookfield”) hostile bid on June 7, 2021.
“We continue to act in the interests of all shareholders in pursuing our Strategic Review and are pleased with the level of engagement from potential counterparties,” said Margaret McKenzie, Chair of the Board and the Special Committee. “In contrast with Brookfield’s recent comments, we do not believe that the premature public disclosure of opportunities being pursued under our Strategic Review serves the interests of the Company or our other shareholders.”
The Special Committee assures shareholders that it has attempted to engage with Brookfield in good faith to negotiate customary terms that would allow Brookfield access to Inter Pipeline’s data room, while allowing the Special Committee to advance alternatives for maximizing shareholder value through a fair Strategic Review process. The non-disclosure agreement Inter Pipeline proposed to Brookfield, which Brookfield declined to receive from Inter Pipeline, would have provided Brookfield a path to access the Company’s confidential information and the opportunity to work constructively with Inter Pipeline’s Board to increase its offer for Inter Pipeline’s shares. It also would require Brookfield to abide by the process being followed by other participants in the Strategic Review, which has been designed in the best interests of Inter Pipeline’s other shareholders.
Heartland Petrochemical Complex
Inter Pipeline reaffirms the disclosure in its news release of April 22, 2021 regarding third-party production capacity contracting, adjusted EBITDA guidance, environmental advantages and other matters pertaining to the Heartland Petrochemical Complex (“HPC”). The project continues to advance well, and Inter Pipeline looks forward to discussing HPC on its first quarter earnings call on May 7, 2021.
Inter Pipeline also reiterates its open invitation to investors to attend a virtual tour of HPC on May 12, 2021 to highlight the impressive construction and operational readiness of the project.
There are Significant Risks to the Value of the Brookfield Share Consideration
Inter Pipeline further cautions shareholders that Brookfield’s $16.50 hostile bid is highly uncertain. According to annual filing disclosures, the share consideration offered by Brookfield can be unilaterally redeemed by Brookfield in its sole discretion and replaced with a security of lower value at any time. Taking the redemption right into account, Inter Pipeline believes the hostile takeover bid is currently worth materially less than Brookfield’s assertions of $17.00 or even the face value of $16.50.
Inter Pipeline is Worth More than the Hostile Bid
As previously disclosed, the Board of Inter Pipeline believes that the hostile bid significantly undervalues Inter Pipeline’s business. The Board has determined that the hostile bid is not in the best interests of the Company or its shareholders.
To reject the hostile bid, simply take NO ACTION. Shareholders who have tendered Inter Pipeline Common Shares in error and wish to withdraw can seek assistance from their broker or Kingsdale Advisors at 1-877-659-1820 (416-867-2272 for collect calls outside North America) or by e-mail at firstname.lastname@example.org.
The Inter Pipeline Directors’ Circular, dated March 8, 2021 provides the full details concerning the Board’s recommendation, including the reasons to REJECT and background to the hostile bid, is available on the Company’s website at www.interpipeline.com, and at www.sedar.com. The Directors’ Circular has been mailed to all persons required to receive a copy under applicable securities laws.
About Inter Pipeline Ltd.
Inter Pipeline is a major petroleum transportation and natural gas liquids processing business based in Calgary, Alberta, Canada. Inter Pipeline owns and operates energy infrastructure assets in Western Canada and is building the Heartland Petrochemical Complex — North America’s first integrated propane dehydrogenation and polypropylene facility. Inter Pipeline is a member of the S&P/TSX 60 Index and its common shares trade on the Toronto Stock Exchange under the symbol IPL. www.interpipeline.com
Join Us: Virtual Tour of HPC
On May 12, 2021, Inter Pipeline will host a virtual tour of HPC, followed by a question period.