Investment Q&A

Q: The recent price decline seems to be reversing with similar voracity. We took the shares for our IPL position, primarily because of the name "Brookfield". It seems to be a name that attracts money.
Is there any other reason that you can see, for the recent volatility ?

Q: I have been holding BIP.UN for several years. Does it make to sell it and buy BIPC to get tax advantage. BIPC is about 3.5% more expensive than BIP.UN, which has narrowed down significantly in the last couple of years. Why did the difference narrow down so much and can it narrow down even further? Thanks.

Q: Just a comment...this morning BMO Investorline journaled additional "cash in lieu" to my accounts for the takeover of IPL. I assume this is as a result of the many comments I made and others that the cash portion for our shares seemed very low, about $18.46/share for me. The new amount raises the cash portion to about $19.90/share. Something went wrong on the distribution and this is much more reasonable but I wish I had taken the $20/share cash offer.

Q: BIPC's stock price has been struggling as the company sorts through its IPL acquisition. When would you anticipate prices will begin to rise again? (Utilities currently held - in relatively equal amounts - are BIPC, AQN, BEP and NPI.) Thank you.

Q: Good buy at these levels? Doesn't seem to be any news to explain the weakness. Closing in on a a 52 week low, 3.5% yield.

Q: Is there an explanation of why the 4 year revenue growth is so different between BIP.UN and BIPC? Here is the data I get from RBC Direct Investing for 2017 to 2020:

BIP.UN: 3,535.0 | 4,652.0 | 6,597.0 | 8,885.0 for a 4 year CAGR of 26%
BIPC: 1,323.0 | 1,561.0 | 1,619.0 | 1,430.0 for a 4 year CAGR of 2%

Of course the amounts are going to be different, but I expected the growth to be similar between the two. Whaaaat?

Thanks.

Q: Hello 5i, I notice that comments are made as to the takeover of Interpipe IPL relating to both BIP and BIPC as the take over company's. What is the relationship of BIP and BIPC as to who really will own IPL now. Also which company BIP or BIPC would look better to invest in. I was a IPL share owner and submitted my shares for the cash option.

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.

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.

Q: I am confused and frustrated about the stock price movement as between BIPC and BIP.UN. Today BIPC is down approximately 1.67% while BIP.UN is up 0.60%.

BIPC recently hit a high of $100 and is now down approximately 23% from such high. Meanwhile BIP.UN is almost at its 52-week high.

I want to buy BIPC because I want to avoid the hassels preparing by tax return that BIP.UN and limited partnership brings along with it (mainly the delay of receiving the tax form from Brookfield).

My question: How do I know I am buying BIPC today at a market equivalent price to BIP.UN ? I want to avoid buying BIPC just to have it further correct while BIP.UN remains the same or increases.

The "efficiency" of the stock market is clearly lacking here and also with all the Brookfield limited partnerships vs. corporation stock variations.

Thanks,
Thomas

Q: Is there any fundamental difference (other than the structure) between the two? BIP.UN is almost at all time highs while BIPC drooped 22% in a few weeks.

Thanks

Q: Good Morning,
Why BIPC is going down so much in the last few days? Thank you!

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.

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?

Q: Earlier this year we created an equal weighted 'balanced' portfolio of 30 Canadian companies in a non-registered account. Most were chosen from companies either covered by a 5i research report or included in a 5i model portfolio. The remainder were chosen, based on the 5i Q&A section, from what appear to be 5i sector favourites. All purchases in the portfolio are made with the intent to be long-term holds (10+ years).

Our intent is to increase our investments in the 30 companies over time. We have recently increased our positions in BIPC and MG. At this time we would like to increase our investments in 10 of the remaining 28 companies. The intent is to increase the remaining 18 in approximately 6 months. Which 10 would you add to today? Please rank them, include a small blurb explaining each choice and indicate an approximate buy price. Thanks!

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.

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.

Q: Last Friday bepc was trading at 7.2% above bep.un. yet bipc was trading 19.8% above bip.un.
Why such a large price difference in bip.un and bipc and do you think they will narrow as they have done in bepc and bep.un?

Q: Why has BIPC dropped almost 10% since the announcement that Brookfield will probably win the Inter Pipeline sweapstakes? Is this a temporary drop or is it expected to last?

Q: I assume Bipc is dropping to the $80 level because of the 0.25 of a share or $20 IPL offer. Does the price usually head back up to where it was pre-acquisition or nor? What sort of time frame?