CALGARY, AB – Inter Pipeline Ltd. (“Inter Pipeline”) (TSX: IPL) is responding to the news release issued June 2, 2021 (the “Brookfield Release”) by Brookfield Infrastructure Partners L.P. together with its institutional partners (collectively, “Brookfield”) announcing its intention to file a variation to its offer (the “Brookfield Bid”) to acquire Inter Pipeline.
As previously announced on June 1, 2021, Inter Pipeline and Pembina Pipeline Corporation (“Pembina”) have entered into an arrangement agreement providing for Pembina to acquire all of the issued and outstanding common shares of Inter Pipeline in an all-share transaction (the “Pembina Transaction”).
The board of directors of Inter Pipeline (the “Inter Pipeline Board”) continues to unanimously recommend the Pembina Transaction to Inter Pipeline shareholders, which is highly strategic for both parties. Inter Pipeline shareholders will benefit from a 175 percent increase to their monthly dividend upon closing and share in significant annual synergies. The Pembina Transaction will also enable shareholders to participate directly in the cash flow growth from the Heartland Petrochemical Complex that is expected to enter service in early 2022 as well as Pembina’s extensive investment opportunities.
The proposed variation to the Brookfield Bid described in the Brookfield Release appears to be on substantially the same economic terms as the private proposal Brookfield made to Inter Pipeline on May 31, 2021 (the “Brookfield Proposal”). The Brookfield Proposal and the proposed Pembina Transaction were reviewed by the Special Committee of independent directors (the “Special Committee”) and the Inter Pipeline Board on May 31, 2021, with the benefit of advice from their financial and legal advisors. After considering the Brookfield Proposal and the proposed Pembina Transaction in detail, and receiving the advice of its financial and legal advisors and the recommendation of the Special Committee, the Inter Pipeline Board was unanimously of the view that the proposed Pembina Transaction is financially superior and in the best interests of Inter Pipeline and its shareholders. Both proposals had substantially equivalent ‘headline numbers,’ however, the Inter Pipeline Board was of the view that the proposed Pembina Transaction provided considerable incremental value for shareholders for the reasons mentioned above, among others.
Inter Pipeline reminds shareholders that no formal variation of the Brookfield Bid has been made by Brookfield, and as such there is no need for shareholders to take any action at this time.