Financial Markets Meltdown

[Jim Blake]

Originally Posted by Dean2

You are spot on Jim.

Just a heads up for those following this thread, Pembina Pipe just agreed to buy Inter Pipe in a friendly deal at 19.25 a share, all share deal. That is a steal of a deal for PPL, they basically got Heartland 75% finished for free. Once Heatland came on stream IPL was easily worth 25-28 and it comes on in 2022. This will be massively accretive for PPL. I bought a large block of PPL this morning as it took the usual big dip on the announcement, and I will end up with more PPL once the swap for the IPL shares I hold happens. This is also a big jump up in dividend from what IPL was paying monthly. (PPL pays out monthly too). Good option for folks looking for monthly income to live on.

I'm thinking Brookfield will show up to the plate...should be interesting what the final share price will be!

[big zeke]

Funny thing is that IPL has been looking for a partner for Heartland for a while and there were no takers. Actually Heartland is coming in over budget and late and that is hard to do in the midst of a downturn (I know, Covid catches the blame here)

No doubt PPL git a good buy here but it only makes sense while the feedstock for Heartland remains cheap, chemical plants often operate at a loss for years (I used to summer student at DOW, trust me, I know).

I think PPL will pay off nicely but I hate to see such consolidation, jobs will be lost for sure.

[MooseRiverTrapper]

Originally Posted by bdub

Oh yeah. Oils got a long way to go yet I’m betting. Last summer/early fall oil was the most hated sector going. Not any longer with WTI looking like its going to stay pretty solidly above 60$ and WCS hanging in not far behind.

OPEC is doing the right thing. These Canadian companies are printing money.

[ward]

Originally Posted by MooseRiverTrapper

OPEC is doing the right thing. These Canadian companies are printing money.

So are the shareholders.

[bdub]

Originally Posted by MooseRiverTrapper

OPEC is doing the right thing. These Canadian companies are printing money.

Yeah. Loving OPEC for sure. They’ve going to keep oil at 60 minimum.

[MountainTi]

Originally Posted by MooseRiverTrapper

Canadian oil and gas. It’s where it’s at.

NG brought prosperity to Alberta and northern BC. I believe it will do it again

[Buckhead]

Originally Posted by Jim Blake

I'm thinking Brookfield will show up to the plate...should be interesting what the final share price will be!

BAM this morning offered $19.75 with 74% of that cash.

[Dean2]

Originally Posted by Buckhead

BAM this morning offered $19.75 with 74% of that cash.

I am loving this, the IPL shares I hold have made some really nice gains since the first Brookfield offer, which was clearly a real low ball attempt but that is what they do. This bidding war will do nothing but good on that front. I still think PPL is a far better partner with much stronger synergies but no matter who wins there is no downside. Have to say though, if Brookfield wins I will sell all the shares in IPL and not buy the acquiring comapny. I have never liked Brookfield's overly complicated financial structuring so I don't hold any Brookfield companies.

[Jim Blake]

Looks like the days of bargain basement energy sector takeovers and acquisitions is over...which is a very good thing.

I agree with Dean that Pembina would be a much healthier scenario. But money talks and you know the rest.

[Jim Blake]

Originally Posted by Buckhead

BAM this morning offered $19.75 with 74% of that cash.

IPL trading at 20.21...this is going to get interesting!

[Dean2]

Originally Posted by Jim Blake

IPL trading at 20.21...this is going to get interesting!

IPL at 20.25 and PPL up a buck from what I bought it for yesterday. Have to admit I am having a real hard time not just stabbing the sell button on both of them, collect the gains and sit on the sidelines to see how it all washes out. Buy back in when it is settled.

[bdub]

Market’s pricing in another offer but hard to say if ones coming or not. BIP already holds a big chunk of IPL and the new BIP offer is clearly the better deal for shareholders and employees. I’m an ex holder of IPL and not selling either of my PPL or BIP now. I like them both, deal or no deal.

[Dean2]

Originally Posted by bdub

Market’s pricing in another offer but hard to say if ones coming or not. BIP already holds a big chunk of IPL and the new BIP offer is clearly the better deal for shareholders and employees. I’m an ex holder of IPL and not selling either of my PPL or BIP now. I like them both, deal or no deal.

You could en up being, but a couple of points; The only employees that will be better off are the board, senior executive and very senior management. However that will only last until Brookfield sells off the component parts of IPL, which is their operating model when buying undervalued assets. Brookfields negotiation methods are likely influencing the board but since the board will be out of a job in the PPL deal they certainly aren't letting self interest get in the way. The fact the board is recommending the PPL offer over the Brookfield one, even though Brookfield had made the higher offer before the PPL offer came out, says a lot.

In terms of who will do a better job with IPL, my bet is Pembina, which from a shareholder perspective means longer term the shareholder is better off. Now part of that is coloured by the fact I do not like Brookfield or the way they operate so there is admittedly a bias.
As tempted as I am to sell out at these over deal prices I think I am going to ride this out and see where it all washes out. Be very interesting to see how this ends up.

[bdub]

Originally Posted by MooseRiverTrapper

OPEC is doing the right thing. These Canadian companies are printing money.

By "coincidence" an Iranian warship caught on fire and sank just a day ago. Today one of Iran's largest refineries is on fire. Probably just bad luck.

[KGB]

Originally Posted by bdub

By "coincidence" an Iranian warship caught on fire and sank just a day ago. Today one of Iran's largest refineries is on fire. Probably just bad luck.

Hehehehehe…..

[KGB]

Originally Posted by Dean2

I am loving this, the IPL shares I hold have made some really nice gains since the first Brookfield offer, which was clearly a real low ball attempt but that is what they do. This bidding war will do nothing but good on that front. I still think PPL is a far better partner with much stronger synergies but no matter who wins there is no downside. Have to say though, if Brookfield wins I will sell all the shares in IPL and not buy the acquiring comapny. I have never liked Brookfield's overly complicated financial structuring so I don't hold any Brookfield companies.

Ok buddy, got some cash thrown into the ppl yesterday based on your advise….If I’m not up at least 20% in a month- I coming to visit you! Just kidding, you know. But I do agree with your point of view. I think we will see ppl in a high 40is by the end of the year….

[fishtank]

Originally Posted by KGB

Ok buddy, got some cash thrown into the ppl yesterday based on your advise….If I’m not up at least 20% in a month- I coming to visit you! Just kidding, you know. But I do agree with your point of view. I think we will see ppl in a high 40is by the end of the year….

dont know about 40 but 27-30 looks good , dont think they should sell for less then the husky offer couple year ago.

[fishtank]

reddit army is back amc is over 100% at $65+

[tirebob]

Originally Posted by fishtank

reddit army is back amc is over 100% at $65+

It's crazy! BB is now on it's way up a ton too... Like 21 percent so far today.

[bdub]

Originally Posted by Dean2

You could en up being, but a couple of points; The only employees that will be better off are the board, senior executive and very senior management. However that will only last until Brookfield sells off the component parts of IPL, which is their operating model when buying undervalued assets. Brookfields negotiation methods are likely influencing the board but since the board will be out of a job in the PPL deal they certainly aren't letting self interest get in the way. The fact the board is recommending the PPL offer over the Brookfield one, even though Brookfield had made the higher offer before the PPL offer came out, says a lot.

In terms of who will do a better job with IPL, my bet is Pembina, which from a shareholder perspective means longer term the shareholder is better off. Now part of that is coloured by the fact I do not like Brookfield or the way they operate so there is admittedly a bias.
As tempted as I am to sell out at these over deal prices I think I am going to ride this out and see where it all washes out. Be very interesting to see how this ends up.

https://www.bip.brookfield.com/press...2021-121054396

https://www.pembina.com/media-centre...etails/135504/

I don't know, have you read both offers? Sounds like the Board of IPL is not looking out for the best interest of shareholders or employees. Probably have a deal made with PPL so they all keep their cushy executive jobs whereas BIP might clean out some of the upper management while leaving the majority of other staff alone. Who knows, it will be interesting to see if PPL steps up. Regardless they are still going to be stuck with BIP as a major shareholder even if they end up on top.

From the PPL offer:

Meaningful Synergies Through Combination: On a run-rate basis, pre-tax synergies are expected to average $150 to $200 million annually. Approximately $100 to $150 million of annual synergies will come from lower general, administrative and operating costs, (AKA Employee Layoffs) and are expected to be realized in the first year after closing.

From the BIP offer:

Brookfield Infrastructure reminded IPL’s representatives that it was a financial investor and, unlike a strategic investor, would not be seeking to generate significant cost synergies by eliminating duplicative jobs. The IPL representatives were also asked whether they were taking into account the interests of other important stakeholders, particularly IPL employees, in its evaluation. Suffice it to say, the Board was aware of all these relevant facts.

Brookfield Infrastructure is taking its Offer directly to IPL shareholders. As the largest shareholder, it is disappointed by the seeming lack of fiduciary responsibility shown by the decision of the IPL Board of Directors to support an inferior proposal by Pembina as announced by IPL on June 1, 2021. Brookfield Infrastructure’s Offer was made privately to the Company prior to the IPL Board of Directors decision to accept the Pembina offer. We believe that IPL shareholders will reach a different conclusion than IPL’s Board of Directors about which transaction is most compelling to shareholders.

[bdub]

Originally Posted by KGB

Hehehehehe…..

Lol, their not to keen on Biden starting to suckhole up to the Iranians. Can't blame em.

[Trochu]

Originally Posted by fishtank

reddit army is back amc is over 100% at $65+

I was gonna buy some too, when it was around the $2/share price. Thought, Covid's almost done, once theaters open, it may go up to $6-$8. Sigh, don't follow through on my thoughts nearly enough.

[KGB]

Originally Posted by fishtank

dont know about 40 but 27-30 looks good , dont think they should sell for less then the husky offer couple year ago.

They are trading at $38 + today…

[fishtank]

Originally Posted by KGB

They are trading at $38 + today…

sorry i misread your ppl was refering to inter .

[fishnguy]

Originally Posted by Trochu

I was gonna buy some too, when it was around the $2/share price. Thought, Covid's almost done, once theaters open, it may go up to $6-$8. Sigh, don't follow through on my thoughts nearly enough.

It could had gone bankrupt too (and probably will in its time). So there is that.

[Dean2]

Bdub

I did read both. The issue is Brookfield will say whatever it can to pad the deal and make it look better for employees and shareholders. Once the deal is done there is absolutely nothing stopping them from breaking up the company and selling off the parts. There is nothing binding in the verbage and rational of the offer to purchase that survives closing of the deal. If you have watched many Brookfield deals you will have seen this game played many times.

[flyrodfisher]

Originally Posted by Dean2

Once the deal is done there is absolutely nothing stopping them from breaking up the company and selling off the parts.

So?
A little history;
The primary pipeline assets of Interpipe and one of the larger pipelines now owned by Pembina were originally owned by one company who decided to break them up.
All the PPL deal will do is bring them back under one roof.

Expect another offer bump as IPL closed at $20.27 today

[tirebob]

Oh my BB is on a tear! Up over 25% in premarket today already and climbing... I don't have a lot but my 50 shares I have been holding are putting a smile on my face right now!

I might not get it, but I am thankful to the MEME stock overlords at the moment! haha!

[Dean2]

Originally Posted by flyrodfisher

So?
A little history;
The primary pipeline assets of Interpipe and one of the larger pipelines now owned by Pembina were originally owned by one company who decided to break them up.
All the PPL deal will do is bring them back under one roof.

Expect another offer bump as IPL closed at $20.27 today

The issue is not Brookfield breaking up the assets. You are completely right, that has gone on forever in the oil patch. The point was about Brookfield saying they were better for jobs, not looking for synergies, would leave the company and staff intact etc and that was a big part of why their offer is so superior to Pembina's. So basically they are lying through their teeth because their pattern after purchase does not match these claims at all. This willingness to deceive and other sharp practices is why I am not a fan of Brookfield in any way.

[flyrodfisher]

Originally Posted by Dean2

The issue is not Brookfield breaking up the assets. You are completely right, that has gone on forever in the oil patch. The point was about Brookfield saying they were better for jobs, not looking for synergies, would leave the company and staff intact etc and that was a big part of why their offer is so superior to Pembina's. So basically they are lying through their teeth because their pattern after purchase does not match these claims at all. This willingness to deceive and other sharp practices is why I am not a fan of Brookfield in any way.

Not a Brookfield fan either... for groups like Brookfield this has become an accounting shell game.
Their mantra is "the sum of the parts is greater than the sum of the whole"

For Pembina on the other hand...in this environment, it is easier to buy a pipeline than build one.

What I can say is that with either Brookfield or PPL...there will be job casualties. Probably more so with PPL as there will be significant duplication. When you get into a data room, staff aren't usually on the top of the agenda.
That will come when the dust settles.

The only winners are the senior execs...they are well taken care of...and this is the lottery many of them have been waiting for....