Bidding War for Midstreamer

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A bidding war has broken out for Canadian midstream player Inter Pipeline after the company said it had agreed to sell itself to rival Pembina Pipeline. Brookfield Infrastructure Partners, which had previously submitted a hostile bid that Inter rejected due to its low valuation, said Wednesday it was raising its offer to an implied C$8.48 billion ($7.02 billion), topping Pembina's C$8.3 billion bid. Brookfield, Inter’s largest shareholder, is attempting to woo other Inter investors with the higher bid and an offer that includes a 74% cash component, versus Pembina's proposed all-stock merger. Inter would be on the hook for a C$350 million breakup fee if it decides to spurn Pembina and go with the Brookfield offer. “Pembina must now weigh whether the industrial logic and asset synergies are sufficient to offset increased [share] dilution from a raised counteroffer, or maintain the current offer and let shareholders choose between the two proposals,” investment bank Tudor Pickering Holt wrote in a research note.

Corporate Strategy , Midstream Companies
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