Brookfield Infrastructure provided an exchangeable LP unit rollover option on its acquisition of Enercare
On October 16, 2018, Brookfield Infrastructure acquired all of the 107M common shares of Enercare Inc. (being all its shares) under a CBCA Plan of Arrangement. The consideration (aggregating C$4.3B) was C$29.00 per share, except that some of the Enercare shareholders elected to instead receive 0.5509 of an Exchangeable LP Unit of a subsidiary LP (“Exchange LP”) of Brookfield Infrastructure Partners L.P. (“BIP”) in exchange for each elected Enercare common share (with a total of 5.7M Exchangeable LP Units being issued). BIP is a Bermuda exempted limited partnership whose units are listed on the TSX and NYSE, and is not a SIFT partnership given that it is not a Canadian resident partnership.
Each Exchangeable LP Unit is exchangeable for one non-voting limited partnership unit of Brookfield Infrastructure Partners L.P. Exchange LP, although a SIFT partnership, is not expected to be subject to significant SIFT tax as it will mostly hold Canadian shares. Those who received Exchangeable LP Units have 75 days from the Arrangement Date to submit the relevant information for making an s. 97(2) election to Exchange LP through the applicable website. Exchange LP may elect to redeem its Exchangeable LP Units after seven years.
Neal Armstrong. Summary of Enercare Circular under Mergers & Acquisitions – REIT/Income Fund/LP Acquisitions – LP Acquisitions of Corporations – Exchangeable Units.