TransCanada bids $848M US to buy rest of Columbia Pipeline Partnership

TransCanada Corp. is offering about $848 million US cash to buy all the equity in Columbia Pipeline Partners LP that it doesn’t already own, strengthening its grip on a pipeline network that stretches from New York to the Gulf of Mexico.

The company’s offer to other investors in the Houston-based limited partnership follows TransCanada’s purchase of the Columbia Pipeline Group. That deal was valued at $13 billion US, including $2.8 billion in debt.

Calgary-based TransCanada effectively became the main partner of Columbia Pipeline Partners LP on July 1 and Monday’s announcement indicates it plans to buy out the other investors in CPPL for $15.75 US per common unit.

It says the offer is 11.3 per cent above the 30-day average closing price for the partnership units. The units closed Friday at $15.30 US.

The proposed transaction is subject to certain conditions, including approval under U.S. anti-trust law and by a majority of CPPL unitholders.

The limited partnership has interests in three regulated U.S. natural gas pipelines that serve markets extending from New York to the Gulf of Mexico, as well as storage and related midstream assets.

At today’s exchange rate, the $848-million US offer is worth about $1.12 billion in Canadian dollars.