Your views on Inter Pipeline Shares buying offer

Hi Guys,
Seek your help and views on my IPL stocks which I hold @22.50 and I have seen the below message whiling logging on to my trading account.
Appreciate if you could suggest your take looking at the message as the offered price is way below present market & my purchase price and I’m not sure if I should hold IPL shares or no? And if I don’t trade as offered what are the consequences?

Dear client, please be advised that there is a voluntary Tender Offer announced for INTER PIPELINE LTD by Bison Acquisition corp that may require your action prior to the deadline. Holders have the following options:

Option 1: To receive CAD $16.50 for each share of INTER PIPELINE LTD tendered. Subject to proration. Tax Consequences: Disposition

Option 2: To receive 0.2060 share of Brookfield Infrastructure Corporation Class A Exchangeable Subordinate Voting Shares for each share of INTER PIPELINE LTD tendered. Subject to proration. Tax Consequences: Disposition

Option 3: Do Not Participate. (Default Option)

To exercise, please contact an Investment Representative prior to June 7, 2021 (11:00 AM Eastern Time). Thank you for giving this your prompt attention. Yours sincerely, HSBC InvestDirect.

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Asked on March 2, 2021 9:17 am

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Private answer

Hey Shail,

It really depends. I sold out of my IPL as soon as the deal was made public as I didn't see significant upside. Since this is an unsolicited bid, if the majority of shareholders don't sell, then BIP is likely going to have to raise the price to make the deal happen. If it does manage to get the majority then a takeover is likely to be imminent. If you do not participate, then you just keep your shares and see what happens. Maybe a higher bid comes, maybe it doesn't and the share price drops again. Many unknowns here.

I would not chose option 1 because you can sell IPL on the open market for more than that right now. If you want BIP, then BIP shares could be interesting. But once again based on that conversion and today's prices, you would be getting 17.68 per share. So, once again - you can sell on the open market and get more.

All depends on what you'd like to do. As mentioned, I already sold out of my IPL shares the day after that deal came out (around 17.60 i think) as i felt there were better opportunities out there to park my cash. My average price was around $19 or so, so took my lumps and moved on.

Mat

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Posted by Mathieu Litalien

Answered on March 2, 2021 1:10 pm

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