Inter Pipeline Urges Shareholders to Take No Action with Respect to Unsolicited Takeover Bid by an Affiliate of Brookfield Infrastructure
Inter Pipeline is committed to exploring all opportunities to create value for all shareholders
CALGARY, AB, Feb. 22, 2021 /CNW/ - Inter Pipeline Ltd. ("Inter Pipeline" or the "Company") (TSX: IPL) today confirmed that an affiliate of Brookfield Infrastructure Partners LP ("Brookfield") has commenced a conditional, unsolicited takeover bid (the "Offer") to acquire all outstanding common shares of the Company not already owned by Brookfield.
The Offer will be reviewed by the Company's Special Committee of independent directors ("Special Committee,") formed by the Board of Directors ("Board") on February 18, 2021, and a response will be provided in due course. The Board has 15 days to provide shareholders with a recommendation regarding the Offer. Shareholders will be notified of the recommendation of the Board through a news release and Inter Pipeline's Directors' circular.
Inter Pipeline urges shareholders to take no action on the Offer and reminds shareholders the Board has initiated a comprehensive strategic review process led by the Special Committee focused on maximizing value for shareholders. Consistent with its fiduciary duties, the Board will evaluate a broad range of options, including exploring a possible corporate transaction, while continuing to seek a partner for a material interest in the Heartland Petrochemical Complex.
"Inter Pipeline is a high-quality energy infrastructure business with a diversified asset portfolio that generates long-term predictable cash flows, all of which understandably make it attractive," said Margaret McKenzie, Chair of the Special Committee. "It is the Board's duty to not only review this offer, but to pursue all available opportunities to unlock maximum value for our shareholders."
The Board remains open to all opportunities that may create shareholder value. The Board continues to believe Inter Pipeline is well positioned to be an energy infrastructure leader in Western Canada and supports its action-based and focused business strategy.
Inter Pipeline is in the final stages of completing the Heartland Petrochemical Complex ("HPC") project, the largest growth project in the Company's history, which is expected to result in a step change in cash flow in 2022. HPC strongly complements Inter Pipeline's existing NGL and offgas processing infrastructure assets and provides a substantial new platform for growth. It will be an industry-leading petrochemical development for North America, with one of the lowest greenhouse gas emissions footprints in the world for producing polypropylene. Polypropylene is a high value, easily transported, recyclable plastic used in the manufacturing of an extensive range of finished products and consumer goods, such as packaging, textiles, automobile components, healthcare products and medical supplies.
Inter Pipeline expects the continued execution of its strategy will provide shareholders with material value creation, especially when HPC becomes operational and the economy emerges from the global pandemic.
TD Securities has been retained by Inter Pipeline and J.P. Morgan has been retained by the Special Committee to assist in the Strategic Review. Burnet, Duckworth & Palmer LLP and Dentons Canada LLP are acting as legal advisors to Inter Pipeline, its Board of Directors and the Special Committee. Kingsdale Advisors is engaged as strategic shareholder and communications advisor, and Longview Communications as communications advisor to the Company.
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 — Canada'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
Certain information contained herein constitutes forward-looking statements and information (collectively, "forward-looking statements") within the meaning of applicable securities legislation that involve known and unknown risks, assumptions, uncertainties and other factors. Forward-looking statements often contain terms such as "may", "will", "should", "anticipate", "expects" and similar expressions. Readers are cautioned not to place undue reliance on forward-looking statements. Such statements reflect the current views of Inter Pipeline with respect to future events and are subject to certain risks, uncertainties and assumptions that could cause Inter Pipeline's results to differ materially from those expressed in the forward-looking statements. In particular, but without limiting the foregoing, this news release contains forward-looking statements pertaining to, and the Company has made certain assumptions regarding, among other things: the strategic alternatives to maximize shareholder value that may be available to the Company and the Company's ability to identify and consummate such alternatives; the completion of HPC and the anticipated cash flow step change in 2022; that HPC will be an industry-leading petrochemical development for North America, with one of the lowest greenhouse gas footprints in the world for producing polypropylene; and that the continued execution of the Company's strategy will provide shareholders with material value creation. Factors that could cause actual results to vary from forward-looking statements or may affect the operations, performance, development and results of Inter Pipeline's businesses include, among other things, risks and assumptions associated with operations, such as Inter Pipeline's ability to successfully implement its strategic initiatives and achieve expected benefits therefrom or otherwise be implemented by Inter Pipeline,including the further development of its projects and facilities; assumptions concerning operational reliability; the potential delays of and costs of overruns on construction projects (including Heartland Petrochemical Complex) and future expansions of Inter Pipeline's assets;the possibility that Inter Pipeline is unable to identify or consummate any acceptable strategic alternatives; the realization of the anticipated benefits of acquisitions and other projects Inter Pipeline is developing; the timing, financing and completion of acquisitions, transactions or other projects Inter Pipeline is pursuing; risks inherent in Inter Pipeline's Canadian and foreign operations; risks associated with the failure to finalize formal agreements with counterparties in circumstances where letters of intent or similar agreements have been executed and announced by Inter Pipeline; Inter Pipeline's ability to generate sufficient cash flow from operations to meet its current and future obligations; Inter Pipeline's ability to maintain its current level of cash dividends to its shareholders; Inter Pipeline's ability to access sources of debt and equity capital; Inter Pipeline's ability to make capital investments and the amounts of capital investments; Inter Pipeline's ability to maintain its credit ratings; the availability and price of labour, equipment and construction materials; the status, credit risk and continued existence of counterparties having contracts with Inter Pipeline and its affiliates and their performance of such contracts; competitive factors, pricing pressures and supply and demand in the oil and gas transportation, natural gas liquids processing and bulk liquid storage industries; increases in maintenance, operating or financing costs; availability of adequate levels of insurance; difficulty in obtaining necessary regulatory approvals or land access rights and maintenance of support of such approvals and rights; risks of war, hostilities, civil insurrection, instability and political and economic conditions in or affecting countries in which Inter Pipeline and its affiliates operate; severe weather conditions and risks related to climate change; terrorist threats; risks associated with technology and cyber security; availability of energy commodities; volatility of and assumptions regarding prices of energy commodities; fluctuations in currency and interest rates; changes in laws and regulations, including environmental, regulatory and taxation laws, and the interpretation of such changes to Inter Pipeline's business; the risks associated with existing and potential or threatened future lawsuits and regulatory actions against Inter Pipeline and its affiliates; general economic and business conditions; the effects and impacts of the COVID-19 pandemic as further described in Inter Pipeline's reports and filings, the extent and duration of which are uncertain at this time, on Inter Pipeline's business and general economic and business conditions and markets, and such other risk factors, assumptions and uncertainties described from time to time in Inter Pipeline's reports and filings with the Canadian securities regulatory authorities including in Inter Pipeline's most recent MD&A and Annual Information Form, and other documents it files from time to time. You can find these documents by referring to Inter Pipeline's profile on SEDAR (www.sedar.com). Such information, although considered reasonable by Inter Pipeline at the time of preparation, may later prove to be incorrect and actual results may differ materially from those anticipated in the statements made. For this purpose, any statements that are not statements of historical fact are deemed to be forward-looking statements. The forward-looking statements contained in this news release are made as of the date of this news release, and, except to the extent required by applicable law, Inter Pipeline assumes no obligation to update or revise forward-looking statements made herein or otherwise, whether as a result of new information, future events, or otherwise. The forward-looking statements contained in this news release are expressly qualified by this cautionary note.