CALGARY, ALBERTA--(Marketwired - March 24, 2014) - Inter Pipeline Ltd. ("Inter Pipeline") (TSX:IPL) announced today that effective immediately its Board of Directors ("the Board") has adopted a Shareholder Protection Rights Plan ("Rights Plan"). The purpose of the Rights Plan is to grant shareholders and the Board adequate time to consider and evaluate any unsolicited takeover bid made for Inter Pipeline's common shares ("Shares"). The Rights Plan provides the Board with the flexibility to identify and negotiate value-enhancing alternatives, and encourage the fair treatment of shareholders in connection with any takeover bid. The Rights Plan is similar to existing shareholder rights plans adopted by other Canadian public companies, and has not been adopted in anticipation of any known take-over bid.
The Rights Plan provides for the issuance of one right ("Right") per Share, with each Right "stapled" to its Share. Initially, Rights certificates will not be distributed to shareholders, nor will their issuance be dilutive to cash flow or earnings per share or change the manner in which shareholders currently trade Shares. However, if a person or group acting in concert acquires beneficial ownership of 20 percent or more of the outstanding Shares, the Rights will separate from the Shares and permit shareholders, other than the acquiring person or group, to purchase additional Shares at a substantial discount to the current market price.
A bid that meets certain criteria intended to protect the interests of all shareholders will be deemed to be a "permitted bid" and will not trigger the Rights Plan. These criteria require, among other things, that the bid be made by way of a take-over bid circular to holders of voting shares and remain open for acceptance by shareholders for at least 60 days.
The Rights Plan has been conditionally accepted by the Toronto Stock Exchange, subject to ratification by Inter Pipeline's shareholders. Inter Pipeline intends to submit the Rights Plan to shareholders for their consideration at the annual and special meeting of shareholders on May 12, 2014 in Calgary, Alberta. If the Rights Plan is not confirmed by Inter Pipeline's shareholders, it will terminate and have no further force or effect.
Full details of the Rights Plan will be available under Inter Pipeline's profile on SEDAR at www.sedar.com in due course.