Alberta Securities Commission Permits Shareholder Rights Plan For First Time Under New Takeover Bid Regime

In its July 12, 2021 precedent-setting decision in Re Inter Pipeline Ltd., the Alberta Securities Commission allowed Inter Pipeline to maintain its tactical shareholder rights plan in place. It also found the conduct of an unsolicited bidder, Brookfield Infrastructure Partners L.P., was clearly abusive to Inter Pipeline's shareholders and the capital market, and therefore contrary to the public interest.

Background

Brookfield made an unsolicited takeover bid for Inter Pipeline. In response, a special committee of Inter Pipeline's independent directors launched a strategic review to maximize shareholder value. The process culminated in Inter Pipeline entering into an arrangement agreement with a white knight, Pembina Pipeline Corporation. The Pembina Arrangement included a break fee of $350 million payable by Inter Pipeline to Pembina in certain circumstances.