Canadian investment company Brookfield Infrastructure Partners has made an unsolicited offer of C$16.50 (€10.70) per share for Canadian petroleum transport and storage company Inter Pipeline.

Inter Pipeline’s assets include more than 3,300 km of oil sands pipelines, 3.8 million bbl of oil sands storage, 3,900 km of conventional oil pipelines, 1.3 million bbl of conventional oil storage, and eight petroleum and petrochemical storage terminals in Denmark and Sweden.

Brookfield, which owns and operates various assets in the utilities, transport, midstream and data infrastructure sectors in the Americas, Asia Pacific and Europe, says that it already holds 19.6 percent of Inter Pipeline, making it the single largest investor.

Shareholders willing to accept the offer will have the choice of receiving cash or 0.206 of a Brookfield Infrastructure Corporation class A exchangeable share for each Inter Pipeline share they hold.

The offer values Inter Pipeline at C$13.5 billion. The offer represents a 23 percent premium on the closing price of Inter Pipeline’s shares on February 10, 2021, the last trading day prior to the announcement of the offer, a 28 percent premium on the 30-day volume-weighted average share prices and a 10 percent premium on research analyst forward-looking share price targets.

Brookfield said Inter Pipeline’s shares are underperforming, with the lowest one-and five-year returns within Canadian energy infrastructure firms. It said Inter Pipeline will remain a standalone company, and that it is willing to increase its offer if it is granted access to due diligence.

An earlier offer in September 2020 was rejected by Inter Pipeline’s board of directors, and Brookfield says the board subsequently “declined to engage constructively on a privatisation transaction citing a view of intrinsic value far in excess of our assessment, largely driven by a more optimistic outlook of future growth and a recovery of commodity prices in excess of current market expectation”.

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18th February 2021