Proxy advisory firm ISS favors Brookfield's Inter Pipeline bid over Pembina deal

Brookfield Infrastructure

18/07/2021 19:58

By Kanishka Singh
    July 18 (Reuters) - Proxy advisory firm Institutional
Shareholder Services (ISS) has favored Brookfield Infrastructure
Partners'  BIP.N  offer for Inter Pipeline Ltd  IPL.TO  in a
blow to a rival bid from Pembina Pipeline Corp  PPL.TO .
    During the past week, Brookfield raised its hostile offer
for Inter Pipeline to about C$8.58 billion ($6.80 billion).
    Before that, Pembina had made an all-stock bid of about
C$8.5 billion, while Brookfield had earlier offered C$8.48
billion, with an all-cash option.  urn:newsml:reuters.com:*:nL4N2OR2ZO
    "The combination with PPL carries execution risk and
shareholders have also been offered a higher competing bid from
BIP which has financing certainty, no regulatory risk, and an
all-cash option, although there is a slight risk that BIP does
not receive the requisite shares if the PPL transaction is voted
down," ISS said in a note over the weekend.
    "Absent materially improved terms from PPL, shareholders
appear to be better off at this time with the riskless option
available through Brookfield's tender," ISS wrote in its note.
    The Canadian pipeline operator has recommended that
shareholders vote for the offer from Pembina. Inter Pipeline
said Brookfield had not presented a formal revised offer and
that shareholders need not take action yet.    
    The bidding war for Inter's oil and gas pipelines, mainly in
Western Canada, as well as storage facilities and processing
plants, comes as North American oil futures have climbed, fueled
by a recovery in travel demand from the early pandemic hit.
    Brookfield said on Thursday shareholders can now elect to
receive either C$20.00 per share in cash or 0.25 of a share of
Brookfield Infrastructure Corp  BIPC.N .
    The sweetened offer came a day after the Alberta Securities
Commission ruled that Inter did not engage in any improper
defensive tactics to fend off Brookfield's hostile takeover bid.
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($1 = 1.2611 Canadian dollars)
    

 (Reporting by Kanishka Singh in Bengaluru; Editing by Steve
Orlofsky)
 ((Kanishka.Singh@thomsonreuters.com; +91 8061822801;))