Inter Pipeline Asks Alberta Securities Commission to Address Inadequate Brookfield Disclosure
CALGARY, AB – Inter Pipeline Ltd. (“Inter Pipeline” or the “Company”) (TSX: IPL) is responding to the news release issued June 18, 2021 (the “Brookfield Release”) by Brookfield Infrastructure Partners L.P. together with its institutional partners (collectively, “Brookfield”) announcing its intention to file another variation to its offer (the “Proposed June 18 Brookfield Offer”) to acquire Inter Pipeline.
Inter Pipeline’s board of directors (the “Inter Pipeline Board”), following the receipt of the unanimous recommendation of the Special Committee of independent directors and financial and legal advice, reconfirms its unanimous recommendation that shareholders REJECT the Proposed June 18 Brookfield Offer and SUPPORT the strategic share-exchange transaction with Pembina Pipeline Corporation (“Pembina”).
The proposed strategic combination with Pembina (the “Pembina Arrangement”) is subject to approval by a vote of shareholders at a meeting scheduled for July 29, 2021. Inter Pipeline will provide shareholders with voting instructions and supporting documentation for the Pembina Arrangement prior to the meeting. The Pembina Arrangement is currently expected to close late in the third quarter or early in the fourth quarter of 2021.
“The Board continues to believe that the Pembina Arrangement provides greater value to Inter Pipeline shareholders underpinned by the combined business’ synergies, strong dividend profile and future investment opportunities,” said Margaret McKenzie, Chair of the Board. “Brookfield’s latest bid variation, the removal of its cash proration condition, does not change our view that the Pembina Arrangement remains the superior proposal and is in the best interests of Inter Pipeline and its shareholders.”
Inter Pipeline reminds shareholders that Brookfield has not yet made a formal variation for the Proposed June 18 Brookfield Offer. If Brookfield does make a formal variation, there is no need for shareholders to take any action if they intend to REJECT it.
Brookfield’s Inadequate Disclosure
Inter Pipeline has applied to the Alberta Securities Commission (the “ASC”) for, among other relief, an order that Brookfield address its inadequate disclosure of material issues related to its takeover bid. The ASC hearing is scheduled for July 7, 2021.
Inter Pipeline believes Brookfield’s disclosure is incomplete regarding the substance of the total return swaps under which Brookfield obtained an additional 9.9% economic interest in the Company. The total return swaps, combined with Brookfield’s beneficial ownership of 9.75% of Inter Pipeline’s shares, provides Brookfield with a purported 19.65% economic interest in the Company.
Inter Pipeline’s application to the ASC alleges that Brookfield used the total return swaps to avoid required early warning reporting obligations. Furthermore, Inter Pipeline is concerned that Brookfield may use the total return swaps in an effort to frustrate shareholder approval of the superior Pembina Arrangement.
Inter Pipeline alleges that Brookfield’s actions with regard to the total return swaps are detrimental to Inter Pipeline shareholders and the capital markets more generally. The Company is asking the ASC to address this matter to ensure the preservation and protection of the rights of Inter Pipeline’s other shareholders.
Inter Pipeline to Defend its Shareholder Rights Plans and the Terms of the Pembina Arrangement
At the July 7 ASC hearing, Inter Pipeline also intends to defend the necessity of its shareholder rights plans and the inclusion of a reasonable termination fee that forms part of the Pembina Arrangement. The hearing was requested by Brookfield, which has applied to the ASC for an order to reduce the termination fee and nullify the Company’s rights plans. Inter Pipeline believes the Brookfield application is without merit.
REJECT the Brookfield Unsolicited Offer
To REJECT the Brookfield Offer, as may be revised by the Proposed June 18 Brookfield Offer, simply take NO ACTION. If you have tendered your Common Shares in error and wish to withdraw, simply ask your broker or contact Kingsdale Advisors for assistance. You can reach 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. For more information, please go to www.interpipeline.com.
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