Inter board pushes for Brookfield’s $16B offer

Inter Pipeline Ltd. says its board of directors is recommending shareholders accept a $16-billion takeover offer by Brookfield Infrastructure Partners LLP.

The Calgary-based company says Brookfield’s revised offer filed July 19 represents a 21 per cent increase over its previous offer filed June 2.

Brookfield is offering $19.75 per share, up from its earlier proposal valued at $16.50 per share.

On Monday, Pembina Pipeline Corp. announced it had terminated its own rival offer for Inter Pipeline. The news came nearly two months after Inter Pipeline entered into a friendly $8.3-billion all-share deal with Pembina equal to $19.45 per share.

Inter Pipeline says it advised Pembina that it would no longer be recommending the Pembina deal in light of Brookfield’s latest offer. It says it was clear the Pembina deal no longer had the support of a majority of Inter Pipeline shareholders and a vote to approve the deal would not have passed. Pembina will pocket a $350-million break fee as a result.

Brookfield’s revised offer gives shareholders the option to receive their entire payment in cash or a mix of cash and shares.

Inter Pipeline says it has not entered into any agreement with Brookfield to formally support the offer. The Brookfield bid expires Aug. 6.