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Jul 13, 2021
CALGARY – July 13, 2021 – An Alberta Securities Commission (ASC) panel issued an oral ruling July 12 on applications brought June 9, 2021 by Bison Acquisition Corp. and Brookfield Infrastructure Corporation Exchange Limited Partnership (Brookfield Application); June 18, 2021 by Inter Pipeline Ltd. (IPL Application); and June 18, 2021 by Pembina Pipeline Corporation (Pembina Application). The applications related to competing proposals for IPL common shares by Brookfield (Brookfield Offer) and Pembina. The hearing of the applications was held on Friday, July 9, 2021.
Brookfield alleged that IPL used improper defensive tactics in response to the Brookfield Offer. The panel dismissed the Brookfield Application, as it found that Brookfield did not establish sufficient grounds for the panel to exercise its public interest jurisdiction and make the orders sought. The panel did not find that IPL's actions were improper.
The IPL and Pembina Applications concerned certain cash-settled total return swap agreements (Total Return Swaps) Brookfield entered into with a swap dealer (Swap Counterparty). The panel held that Brookfield's use of and disclosure relating to the Total Return Swaps was clearly abusive to IPL shareholders and the capital market, and therefore contrary to the public interest. In addition, the panel found that the disclosure in the Brookfield Offer did not comply with the requirements in the applicable regulatory instrument. It concluded that Brookfield's limited disclosure regarding the Total Return Swaps adversely affected IPL shareholders and the IPL auction process.
With a view to protecting the market and the integrity of IPL shareholders' choice between Brookfield's and Pembina's competing proposals for IPL, the panel issued orders in the public interest:
The ASC panel will issue its decision, with reasons, in writing at a later date.
The ASC is the regulatory agency responsible for administering the province’s securities laws. It is entrusted with fostering a fair and efficient capital market in Alberta and with protecting investors. As a member of the Canadian Securities Administrators, the ASC works to improve, coordinate and harmonize the regulation of Canada's capital markets.
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