Inter Pipeline reviews options in response to hostile $10.6B Brookfield takeover bid

Calgary-based Inter Pipeline Ltd. says it has initiated a review of strategic alternatives in response to a hostile takeover bid launched last week by its largest shareholder, Brookfield Infrastructure Partners LP.

It says it will evaluate options that could include a corporate sale while it continues to try to find a partner to help develop its $4-billion Heartland Petrochemical Complex now under construction near Edmonton.

Brookfield has said it would offer $16.50 per share in cash or 0.206 of a Brookfield Infrastructure Corp. class A exchangeable share for the Inter shares it doesn't already own, with the maximum cash available of $4.9 billion. The price values Inter at about $7.1 billion.

It said it discussed prices with Inter "in the range of $17 to $18.25" but would need to study its books to "substantiate" its growth potential and its timeline and commercialization objectives for Heartland before making any increase to its offer.

Analysts have said the takeover battle could turn into a drawn out contest with the potential for a white knight to drive up the offering price.

Inter also announced fourth-quarter results on Thursday, reporting net income of $169 million on revenue of $624 million in the last three months of 2020, compared with income of $100 million on revenue of $644 million in the same period of 2019.