Game Changer! and stock is now rerating higherTwo important pieces of information in the report below.
1. Managment confirms they bought NuStar but they are not simply selling Nustar. They are now selling a platform. (see yellow highlight below) It means management feels that the combined storage business is now worth a lot more money. And the combined business will likely attract several potential bidders.
2. The book value of Storage is $1.2 billion but the asset value is $1.6 billion dollars. (see blue highlight below). With $1.6 billion, IPL could easily complete Heartland and immediately start two more projects waiting in their pipeline. Market concerns about their debt would be gone.
Putting Storage on the block has also given management the upper hand in any potential bid to buy the whole company. With an extra $1.6 billion in cash, there is no pressing need for them to accept any offer to buy the company unless it is priced to maximum value. Buyers no longer have any leverage to use to negotiate the price down. And with the stock already rerating higher, a bid between $35 - $40 is realistic.
My preference would be management not sell the company. These guys are experienced and they know how to get results. This is an investment I would like to hold long term.
Inter Pipeline execs refuse to answer questions on reported takeover offer 
The Canadian PressAugust 9, 2019
Inter Pipeline execs refuse to answer questions on reported takeover offer
CALGARY — Executives with Inter Pipeline Ltd. are refusing to confirm or deny a report that a potential buyer recently made a $30 per share offer for the company.
The report in a Thursday morning article in the Globe and Mail, which didn't identify the bidder and quoted unnamed sources as saying the offer was rejected, was linked to a nine per cent Inter stock price surge to $23.64 on the Toronto Stock Exchange on Thursday.
Inter shares continued to rise on Friday, up four per cent to $24.60 at noon EDT, before trading was halted pending news just before 2 p.m.
On a morning conference call to discuss second-quarter results, both CEO Christian Bayle and chief financial officer Brent Heagy refused to answer analyst questions about the story.
"The board understands very clearly what its fiduciary duties are and the board would carefully consider any credible offer and determine if it's in the best interest of shareholders," said Bayle, after an analyst asked whether the company would typically feel obligated to tell shareholders about a takeover offer.
"Regarding whether you need to disclose something or not, that would really depend on the circumstances ... and the board in consultation with legal and financial advisers would decide whether disclosure is appropriate."
The executives did provide detail about a separate announcement Thursday after markets closed that the company is putting its European bulk petroleum storage business on the block — it has operations in the U.K., Denmark, Sweden, Germany, Netherlands and Ireland with about 37 million barrels of storage capacity.
The sale formed part of the rationale for buying NuStar Energy's European storage business for $354 million last fall because its U.K. and Netherlands terminals fit well with its existing European storage assets and made a better package, Bayle said.
If a sale is successful, the proceeds would be used to pay down debt and help finance the midstream Calgary-based company's $3.5-billion Heartland Petrochemical Complex project now being constructed northeast of Edmonton.
"We've always had in the back of our minds that some sort of portfolio management process would be attractive in terms of funding our large capital growth platforms, ever since we announced HPC," Bayle said on the call.
"We were not simply buying NuStar and selling NuStar, we bought NuStar and now we're selling a platform."
In a research note, analyst Nate Heywood of AltaCorp Capital pointed out the European storage assets deliver implied annual adjusted earnings of $112 million and are listed by Inter as carrying a
net book value of $1.2 billion and total asset value of $1.6 billion, suggesting the sale could relieve the company's reliance on a $1.2 billion credit facility. In its second-quarter results news release out Thursday, Inter reported spending $287 million on Heartland in the quarter to take total capital incurred so far to $1.6 billion.
It said 1,200 construction workers were on site at the end of June building the project which is designed to convert cheap and plentiful Alberta propane into 525,000 tonnes per year of the plastic polypropylene.
Inter reported record second-quarter net income of $260 million, nearly double the $136 million it declared in the same period of 2018, with the increase mainly resulting from a one-time $144-million provision from the staged reduction in the Alberta corporate income tax rate from 12 to eight per cent by 2022.
Inter also reported a slight rise in revenue to $642 million from $631 million and a decrease in its core pipeline volumes to 1.34 million barrels per day from 1.38 million bpd a year earlier.