TC Energy Corporation TRP recently announced that it has offered to acquire all TC PipeLines’ TCP outstanding units for $1.48 billion that it does not completely own. The move comes at a time when the company plans to remove the master limited partnership (MLP) structure of TC PipeLines, a corporate set-up once popular in the U.S. pipeline industry.
This strategic action will provide TC PipeLines unitholders with 0.650 common shares of TC Energy for each issued and outstanding publicly-held TCP common unit, accounting for a 5.4% premium to the closing price as of Oct 2.
The currently Zacks Rank #3 (Hold) TC Energy made its proposal to the board of the general partner of TC PipeLines. This is because the general partner of TC PipeLines is a subsidiary of TC Energy and a conflicts committee comprising independent directors of TC PipeLines will be formed to take into consideration the offer