TC Energy Corporation - President and CEO, Russ Girling
President and CEO, Russ Girling
Source: TC Energy
  • Canadian energy giant TC Energy (TRP) has made an offer to acquire the rest of TC PipeLines in an effort to consolidate its existing interest
  • According to data from Refinitiv, TC Energy currently holds a 23.96 per cent stake in TC PipeLines
  • Under the terms of the deal, the shareholders of TC PipeLines would receive 0.65 common shares in TC Energy in exchange for each share in TC PipeLines
  • The offer reflects a 7.5 per cent premium over TC Energy’s shares price on the NYSE as of October 2, and values TC PipeLines at approximately C$1.96 billion
  • TC Energy (TRP) is currently down 1.25 per cent and is trading at $55.21 per share

Canadian energy giant TC Energy (TRP) has offered to acquire the rest of TC PipeLines in an effort to consolidate its existing interest.

According to data from Refinitiv, TC Energy currently holds a 23.96 per cent interest in TC PipeLines, which currently supplies approximately 13 per cent of all daily natural gas needs in the United States.

Under the terms of the deal, the shareholders of TC PipeLines would receive 0.65 common shares in TC Energy in exchange for each share in TC PipeLines.

This exchange represents a 7.5 per cent premium compared to TC Energy’s share price on the New York Stock Exchange as of October 2, 2020, and values TC PipeLines at roughly C$1.96 billion, or approximately 35.2 million shares in TC Energy.

The offer was submitted to the Board of Directors of TC PipeLines’ general partner, which is a wholly owned subsidiary of TC Energy. As such, a Conflicts Committee will be formed to assess the proposal, consisting of independent directors from TC PipeLines’ Board.

According to an announcement dated August 5, TC PipeLines posted a net income of approximately $80.9 million for the second quarter of 2020, representing a marginal increase compared to roughly $75.6 million in the same period last year.

Nathan Brown, President of TC PipeLines, said the company’s diversified portfolio had generated the “dependable results” that shareholders had come to expect.

“Looking ahead, we will continue to conservatively manage our financial position and self-fund our ongoing capital expenditures.

“We believe we are well positioned to continue to expand and enhance our existing infrastructure and to create value for our unitholders well into the future,” he added.

TC Energy (TRP) is currently down 1.25 per cent and is trading at $55.21 per share at 11:02am EDT.

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