Brookfield Business Partners is looking to take Teekay Offshore private and is offering to buy up the company's remaining outstanding shares for $1.05 in order to do so.
The Toronto-based private equity firm made the $43.68m offer Monday morning and it is subject to the approval of Teekay Offshore's directors.
In a letter, Brookfield chief executive Cyrus Madon said the $1.05 price for the 41.6 million shares was a fair offer.
"[I]n light of our assessment of TOO’s likely need for additional capital to support growth and address upcoming debt maturities, and TOO’s limited options for obtaining additional capital from either the public equity or debt markets, we believe that operating as a private company will ultimately be in TOO’s best interest," Madon wrote.
The deal would see Teekay Offshore merge with a Brookfield subsidiary. It will be reviewed by Teekay Offshore's conflicts committee, made up of directors Ian Craig, David Lemmon and John Peacock.
Brookfield currently owns 77.1% of the Vancouver-based, New York-traded company's 478.3 million outstanding shares — 300.9 million outright, plus 67.9 million via warrants.
Monday morning, Teekay Offshore shares opened at $1.10, down from $1.21 over the weekend. In early trading, shares were down more than 7% to $1.07.
On 30 April, Teekay Corporation agreed to sell its ownership stake to Brookfield for $100m.
Then, the move was hailed as a "win-win" for Teekay Corporation, by J Mintzmyer, lead researcher at Value Investors Edge and a financial blogger, as the company got cash in exchange for its weakest asset.
Brookfield, meanwhile, enters the offshore sector as indicators appear to tick up.
