Brookfield Business Partners has sweetened the pot in its bid to take over Teekay Offshore, earning the approval of the owner's board in the process.
The Toronto private equity firm is now offering $1.55 for new Teekay Offshore common shares with limited voting rights and transferability for the remaining 162 million shares Brookfield does not already own.
The new offer is a $0.50 improvement over its initial $1.05 offer and more than the $1.16 Teekay Offshore shares closed at on Monday.
Teekay Offshore’s conflicts committee and advisors “unanimously approved the merger agreement and determined that the transaction contemplated thereby was advisable and in the best interests of the partnership and the unaffiliated unit holders,” the company said.
Brookfield Business Partners announced its intention to take Teekay Offshore private in May in a $43.68m offer after it bought Teekay Corp out of the company for $100m three weeks prior.
The offer rankled shareholders. In a letter 16 Teekay Offshore holders, lead by JDP Capital Management, argued the company is worth at least $4 per share.
Over the last year, Teekay Offshore shares have never traded below $1.06.
The deal resulted in two lawsuits, one in July and one in August.
The July suit, from the same group of shareholders that signed on to the letter, accuses Brookfield of squeezing out shareholders after recapitalising the company in 2017 and Teekay Offshore’s board and partners of sitting idly by and allowing it to happen.
The August lawsuit, from Steven Monosson and Mark Whiting, accused Brookfield and Teekay Offshore’s partners and leadership of breaching their fiduciary duty to shareholders.
Initial pre-trial conferences in both cases – both filed in Manhattan federal court – will be held on 17 October.
Neither JDP Capital Management nor Monosson nor Whiting immediately returned requests for comment.
In early trading Monday, Teekay Offshore shares shot up, $0.37 or 38%, to $1.53.
