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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Please rate your top 5 electric Canadian utilities
1. for long term growth potential
2. for safety in a correction.
Thanks

Read Answer Asked by Lawrence on September 16, 2021

Q: Greetings:
I know because it has been mentioned countless times that you are not tax experts, but perhaps you can help. When does a section 85 form need to be filed and when not? In the case of IPL, PWF, Uranium participation by Sprott Uranium Trust it is necessary, but not with score media and Penn. Perhaps it depends if it is a merger or acquisition, and what determines this. Perhaps the rules have changed in the last months. Thanks for your help.
BEN.

Read Answer Asked by BEN on September 14, 2021

Q: Hi 5-i:
Not a question,but rather a comment. I notice today that some members have written in about the results of what they have received from offering their IPL shares to Brookfield. I had 40,618 IPL shares times .250 = 10,154 exchangeable units, however, RBC direct investing showed in the activity section of my account 40,618 times .24974626 = 10,144 brookfield units. I am short 10 units times an approximate value of $ 71.00 = $ 710.00. Brookfield is using the .24974626 factor instead of the .250 that they offered. I am waiting on a resolution to the matter, but encourage others to check their account, and with their broker, and if so to express their discontent to Brookfield. They will save millions by using the incorrect multiplier. I experienced a similar problem when they spun out the BEPC shares. The announcement stated that all allocations would be rounded up, but when it didn't happen, I checked with my broker and they said that they were not allocated enough shares to do that. I recall that 5-i had some questions concerning that issue.
Thanks,
Ben.

Read Answer Asked by BEN on September 01, 2021

Q: Can you explain to me how Option 2 is supposed to work for the IPL takeover. Option 2 is 0.25 shares of BIPC subject to proration. In the Aug. 20 group, 90% of the IPL shares were converted to BIPC for those who chose Option 2. What happens to the remaining 10%? Are they paid the equivalent of 0.25 of a BIPC, or $20/share or ?? Since I received only $18.68 for my 10% I am thinking that I did not get 0.25 BIPC equivalent. Thanks. Feel free to answer privately if you prefer.

Read Answer Asked by Earl on August 31, 2021

Q: Hello 5i I own 2000 shares of IPL and am confused with the 4 options that the shares must be submitted to in the BIPC 20.00 per share takeover. My cost is 24.00 per share. I think BIPC has room to appreciate in share price and there yield is around 3.5% what do you think about BIPC as an investment. So I have to maybe report a tax loss depending on the option I pick. Could you comment on each 4 options the pro's and cons. Also what is the clarification of "Eligible Electing Shareholders Only" which is stated in option's 3 and 4.

Read Answer Asked by Michael on August 25, 2021

Q: What is the strategic value of BIPC acquiring IPL? Most pipelines have under performed (stock price performance) the past 5 years. Oil is not a growth industry. Why not buy a renewable energy name like NPI instead? Also, how significant is the deal relative to its entire portfolio? Is there anyway to get a % revenue/earnings breakdown of the industries BIPC is involved with?

Read Answer Asked by Albert on August 23, 2021

Q: Hi Team,

I have owned IPL for 18 years now and have incurred a loss over that period. Regarding the purchase of this company by Brookfield Infrastructure; if I accept their offer (cash/stock etc.) am I still able to claim my loss as a capital loss even though in my mind no real disposition has taken place? I cannot find succinct enough information on this in order to make my decision.

Thank you so much,
Dean

Read Answer Asked by Dean on August 18, 2021

Q: Hello 5i Team

Inter Pipeline according to the TMX website has 429,219,175 Listed Shares Outstanding and 429,200,000 Total Shares (All Classes) outstanding.

Inter Pipeline according to Q2 financials has 429,200,000 shares outstanding.

Brookfield in their press release dated July 15 states the Brookfield entities own 41,848,857 shares and have an economic interest (but not voting control) through Total Return Swaps in 42,492,698 shares.

1 – Why is there a discrepancy in the shares outstanding on the TMX website and IPL’s financial statements?

2 – What is the actual number of shares that are required to be tendered to BIPC’s offer to meet the 55 % requirement set by the Alberta Securities Commission?

3 – What happens if the percentage of IPL shares tendered to BIPC offer is greater than 55 %, but less than 90 % (where BIPC can force the takeover of the remaining IPL shares)?

Thanks for all you answers during the saga of this takeover.

Read Answer Asked by Stephen on August 12, 2021

Q: Hello friends,

I own IPL:CA in my RRSP account and, since I like BIP, I would like to continue with them.

As we know, the offer is $CAD 20 or 0.25 of a BIPC:CA share subject to proration.

However, there is a fairly large price differential between BIP:US/BIP.UN:CA and BIPC:US/BIPC:CA and I would like to take advantage of that.

My plan is to tender for cash and then buy BIP:US/BIP.UN:CA.

Is there any tax impact on holding BIP:US/BIP.UN:CA (a Bermuda LP) vs holding BIPC:US/BIPC:CA (a Canadian corp) in an RRSP account e.g. withheld taxes?

Does my plan make sense?

Thank you for your valuable advice.

Read Answer Asked by Iulian on August 11, 2021

Q: Hello 5i Team

BIPC in their July 19 press release quoted the Institutional Shareholder Services (ISS) report that recommends IPL shareholders vote for the BIPC offer to purchase IPL.

Is the ISS report available to general investors? From what I read on ISS website (buried under the Press Center page), ISS reports are not made public, nor does ISS issue press releases.

Is BIPC being disingenuous in touting the ISS report, when small investors are not able to review the ISS report and make their own decision on whether to accept the recommendations of ISS and vote on the BIPC takeover?

Thank you

Read Answer Asked by Stephen on July 22, 2021

Q: Hello 5i Team,

If interest rates were too rise, how would you rank these pipeline companies in regards to their debt levels and their potential future growth.

I appreciate you response as all ways.

Ed

Read Answer Asked by Edward on July 21, 2021

Q: Hello 5i Team

With respect to the ongoing take-over/merger of IPL by BIPC/PPL, I have the following questions:

1 – There appears there is a time lag of 22 days from the filing date of BIPC “Notice of Variation” to the meeting date (i.e. third Notice of Variation filed July 15 to proposed meeting date of August 06). Is this a stipulated regulatory
requirement?

2 – If the required notice period is 21 or 22 days, then is it correct that PPL would NOT be able to revise its offer of 0.5 shares of PPL for each IPL share prior to BIPC meeting date?

3 – At current prices, for BIPC/IPL/PPL, who is buying/selling IPL in the market?

If an IPL purchaser would want to vote for the BIPC offer, they could buy shares of BIPC cheaper than the equivalent amount of BIPC they would receive in the BIPC offer.

If an IPL purchaser would want to vote for the PPL offer, they could buy shares of PPL cheaper than they could buy equivalent amount of IPL shares.

It would make sense for existing shareholders (from prior to announcement) to hold and wait for the results of the bidding war unless one wants cash from either proposal.

4 – What are 5i thoughts on who will ultimately win this takeover battle?

Thanks

Read Answer Asked by Stephen on July 16, 2021

Q: Hi 5i team,
I have been holding onto IPL, and hoping to unload it at maximum value when the battle between PPL and BIPC is 'done'. Do you think we are there yet? I plan to move the funds away from the energy sector so I'm not looking to pick up PPL shares.
Thank you,
Ian

Read Answer Asked by Ian on July 15, 2021

Q: Does the Brookfield offer for IPL include an option to only receive .225 of a BIPC share, instead of a mixture of shares and cash. I got lost in the fine print when they started talking about pro-ration and market value of the incremental 8 million BIPC shares.

Read Answer Asked by Peter on July 09, 2021

Q: Hi
Please note PPL is not available in the short search. It was required to add :ca to bring it up.

Would you please expand on your comment earlier about Brookfield wining the bid for IPL? Was this just because the bid is out there or do you have an opinion.


In my position Brookfield deal is a big loss due to taxation(25% capital gains hit) as well as the benefit of holding PPL shares ( dividend, growth, Heartland participation, PPL Reputation) The share price of IPL is now tracking PPL (0.5 x $41.40 = $20.70) and is way above the Brookfield offer($19.50 Maybe? or some kind of shares?).

Brookfield offer is no longer financially better than PPL offer.

Is there something else in this?
Dave

Read Answer Asked by Dave on June 18, 2021