Incitec Pivot Ltd T.IPL

RE:Why Accept Ppl offer?

[roberto146]

"With BIPC Share price at about $96.80, their offer is $21.78; .225 x 96.80"

stjb64: The BIPC offer is 20.22 using the numbers you give at the moment.
The BIPC 0.225 offer only applies for the first 23 Million BIPC shares for all takers (or 102.2 Million IPL shares), the next 8 Million BIPC shares applies for Canadan holders (or 35.6 Million shares); both conversion offers are pro-rata, so maximum 137.8 IPL shares by conversion. The balance of  ~291 Million shares are to be taken at 19.50. The blended price using your numbers is 20.22. Of course these numbers change as the market prices fluctuate. Right now the difference is pennies, which changes every minute.
There is also the issue of taxes to be paid on the cash offer by BIPC. If you bought IPL higher than 19.50, no problem taxwise, but if you bought lower you pay capital gains. A lot of people bought lower so taxes could be significant.
No taxes on the PPL straight conversion offer, at least for Canadian holders - I don't know about the US.
Another factor is the higher yield to be had by converting to PPL shares.
I am not clear from their offer statement if the pro-rating of eligible shares to be converted includes their own holdings and the holdings of Bison Acquisition, a subsidiary of theirs formed to acquire IPL shares. If so, this would reduce the number of shares to be converted by other holders, and require a higher proportion of the offer to be cash, at 19.50/share.
"Shareholders of IPL should be aware that owning BIPC Shares may subject them to tax consequences both in the United States and in Canada. The offer to purchase and takeover bid circular may not describe these tax consequences fully. IPL shareholders should read any tax discussion in the offer to purchase and takeover bid circular, and holders of IPL Shares are urged to consult their tax advisors."
And:
IPL shareholders should be aware that, during the period of the Offer, Brookfield Infrastructure or its affiliates, directly or indirectly, may bid for or make purchases of the securities to be distributed or to be exchanged, or certain related securities, as permitted by applicable laws or regulations of Canada or its provinces or territories.