TC Energy proposes to purchase the remainder of its US pipe operations

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CALGARY – Pipeline and power company TC Energy Corp. is preparing to buy the remaining unitholders of TC PipeLines, LP, a US master limited partnership it operates, for approximately US $ 1.48 billion ($ 1.97 billion) in shares.The Calgary-based company said it would offer 0.65 shares of the parent company for each unit of TC PipeLines, equivalent to US $ 27.31 per unit based on TC Energy’s closing price on Friday. and reflecting a 7.5% premium over 20 days. volume-weighted average price of TC pipelines.

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. “



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