Benzinga | Jun 2, 2021 07:17AM EDT

Brookfield Infrastructure To Launch Revised Cash And Share Offer Directly To Inter Pipeline Ltd., Valued At C$19.75/Share

* Aggregate cash and share-based consideration totaling C$19.75 per Inter Pipeline Ltd. (TSX:IPL) ("IPL" or the "Company") share1, representing a 4.4% premium to the Pembina Pipeline Corporation ("Pembina") share-based offer valued at C$18.91 per share as of market close on June 1, 2021.

* Cash component of the Offer represents 74% of the total consideration, compared to zero in the Pembina offer.

* Brookfield Infrastructure has received all regulatory and anti-trust approvals and can close as early as 10 business days from the filing date of the variation to our Offer.

* Preserves significant local Canadian jobs compared to IPL's alternative cost synergy-driven transaction.

BROOKFIELD, NEWS, June 02, 2021 (GLOBE NEWSWIRE) -- Brookfield Infrastructure Partners L.P. (NYSE:BIP, TSX:BIP), together with its institutional partners (collectively, "Brookfield Infrastructure", "we" or "our"), is pleased to announce its intention to file a variation to its offer to acquire IPL, by no later than June 4th 2021, at a price per IPL common share currently valued at C$19.75 (the "Offer")1.

Brookfield Infrastructure is taking its Offer directly to IPL shareholders. As the largest shareholder, it is disappointed by the seeming lack of fiduciary responsibility shown by the decision of the IPL Board of Directors to support an inferior proposal by Pembina as announced by IPL on June 1, 2021. Brookfield Infrastructure's Offer was made privately to the Company prior to the IPL Board of Directors decision to accept the Pembina offer. We believe that IPL shareholders will reach a different conclusion than IPL's Board of Directors about which transaction is most compelling to shareholders.

Background to the Offer

IPL Management and the Special Committee provided Brookfield Infrastructure access to its data room on May 14th. Brookfield Infrastructure carried out confirmatory due diligence for approximately two weeks and received good cooperation from IPL Management. Between May 14th and May 31st, Brookfield Infrastructure held discussions with representatives ofIPL and its Board Chair and submitted several proposals. During these discussions, Brookfield Infrastructure provided an education session with the Chair and its advisors around the structure of BIPC. Brookfield Infrastructure was advised that the session addressed their questions and that the Board was not discounting the BIPC Share consideration in its evaluation of our Offer.

In the afternoon of May 31st, Brookfield Infrastructure was informed that the IPL Board was inclined to accept a competing proposal and that Brookfield Infrastructure should urgently submit its best offer.

In describing the merits of our proposal, Brookfield Infrastructure reiterated its majority cash plus attractive share consideration and emphasized that we had received all required regulatory approvals and therefore could close within weeks with minimal transaction risk. Brookfield Infrastructure reminded IPL's representatives that it was a financial investor and, unlike a strategic investor, would not be seeking to generate significant cost synergies by eliminating duplicative jobs. The IPL representatives were also asked whether they were taking into account the interests of other important stakeholders, particularly IPL employees, in its evaluation. Suffice it to say, the Board was aware of all these relevant facts.

On the evening of May 31st, Brookfield Infrastructure submitted its final offer valued at $19.50 per share comprised of 74% cash and 26% BIPC shares. That evening we were informed that the "totality" of the competing offer was superior, and exclusivity had already been signed.

Upon reviewing the details of the Pembina offer and the arrangement agreement between IPL and Pembina (the "Arrangement Agreement"), we fail to understand why an inferior offer from the perspective of aggregate consideration, transaction certainty and timeline to completion was recommended by the IPL Board.