PROCESSWEST Magazine Online

Brookfield looks to take Inter Pipeline private

By Reuters   


Brookfield Infrastructure Partners L.P. said it has offered to take Canada’s Inter Pipeline Ltd private for about $13.5 billion including debt, as it seeks to benefit from rebounding oil and gas demand.

Brookfield, which owns and operates assets in the utilities, transport and storage sectors, said it has acquired 19.65 per cent economic interest in Inter Pipeline, to become the top shareholder in the Calgary-based company.

The infrastructure firm offered $16.50 per share for Inter Pipeline, a 23.13 per cent premium Wednesday’s close, valuing the company’s equity at $7.08 billion. Brookfield said it is willing to sweeten its offer to between $17 and $18.25 a share if it is granted access to due diligence.

Brookfield said it started amassing Inter Pipeline shares in March 2020 and first approached the company to discuss a deal in September, but discussions stalled as the two companies had markedly different views of Inter Pipeline’s value.


Pipeline space for crude was in high demand in western Canada before the COVID-19 pandemic hit and caused both oil demand and supply to fall sharply. The region’s production has rebounded quickly this year.

“Despite a strong recovery in global equity markets and a return of commodity prices to pre-COVID levels, IPL’s share performance and credit profile continues to be strained,” Brookfield said in a statement detailing its offer.

Inter Pipeline did not immediately respond to a request for comment. Shares in the company nearly halved through 2020 but have ticked up about 13 per cent since the start of this year.The offer is fully financed, with a maximum cash consideration of about $4.9 billion and a maximum aggregate number of BIPC shares issued of about 19 million, Brookfield said.

In 2019, Inter Pipeline rejected a $12.4 billion buyout offer from an unnamed bidder, with media reports later revealing the suitor as Hong Kong billionaire Li Ka-shing. That offer valued Inter Pipeline shares at around $30 each.



Stories continue below

Print this page

Related Stories