The repurchase of the 74.5% of the partnership that it does not yet own will require TC Energy to issue up to 35.2 million shares, which will add approximately 3.7% to its total of 940 million outstanding.
In Toronto, TC Energy closed a dime at $ 55.90 after falling as low as 96 cents earlier in the day. The stock has fallen more than 25% since reaching a 52-week close at $ 76.06 on February 20.
On the New York Stock Exchange, shares of TC Pipelines under the symbol TCP closed 12% at US $ 29.02. The partnership has eight interstate gas pipelines that serve markets in the western, midwestern and northeastern United States.
In a report to investors, analyst Ian Gillies of Stifel FirstEnergy points out that TC Energy would also take $ 1.9 billion ($ 2.5 billion) of TC Pipelines’ net debt as part of the transaction.
“Since early 2018, the share prices of TRP and TCP have decoupled, with TCP losing its relevance as a fundraising vehicle,” he said. “As such, it makes sense that TRP consolidates these assets. “