Inter Pipeline urges shareholders to reject Brookfield's hostile bid

Inter Pipeline Ltd on Tuesday asked shareholders to reject Brookfield Infrastructure Partners' hostile bid, saying the offer "significantly undervalues" the Canadian oil and gas transportation company.

Brookfield last month formally launched a hostile bid with the same C$16.50-per-share offer that Inter had rejected as inadequate weeks ago.

The offer from Brookfield, which acquires and manages infrastructure assets, had valued Inter at about C$7.08 billion ($5.62 billion).

Brookfield had said in February that it was willing to raise its offer to as much as C$18.25 per Inter share if the company comes to the negotiating table, but Inter turned it down and later launched a strategic review of options.

"The board believes the hostile bid significantly undervalues Inter Pipeline's standalone plan," the company said in its statement, adding that it believes superior offers or other alternatives may emerge.

Inter said last month its formal review could include a possible "corporate transaction." The board is also looking for a partner for Inter's Heartland Petrochemical Complex (HPC) in central Alberta.

While several analysts agree that the offer is low, they had said accepting the offer would be the most likely outcome for Inter.

The pandemic has hit Canadian oil and gas companies hard, crushing fuel demand, and leading to reduced crude production.

Inter Pipeline's assets include over 7,000 km (4,300 miles) of pipelines and 5 million barrels of oil storage in Western Canada, as well as natural gas liquids processing plants.