IPL/Pembina merger

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Any thoughts on how to play the Inter Pipeline/Pembina Merger? I have had shares in the company for many years and some that I picked up about 18 months ago. I was planning on selling them if they got close to what I bought them for as my faith in the company has waned (heartland project…) as has my interest in the industry as a whole. However this merger is looking interesting. There seem to be a few potential upsides. What is your take on it?

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Asked on June 2, 2021 6:35 pm
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HI there,

I used to own IPL as well, but like you became disenchanted with managemetn. They've made many questionable decisions over the years, so when BIP came in with their initial offer, I jumped ship. Now that there is a mini bidding war, it will be interesting to see how this all plays out.

There is however, a floor now. Since there are two bidders, both won't walk away (like BIP could have previously). So $19.50 should be the around the 'floor' and while BIP did raise its big, I don't see this going much higher than 22-23 per share if the parties keep upping their big. I do prefer the PPL bid (not only because i own PPL) because i think there are many more synergies to be had. They also have an excellent track record of handling big projects (unlike IPL) so I would be more confident with their involvement here.

While i like BIP - it is more of an asset management company - buying, selling companies all the time. Overall however, with two bidders and bids very close to each other, at the very least there is a floor now and little risk of neither closing.

Mat

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Posted by Mathieu Litalien
Answered on June 3, 2021 5:55 am