Teekay Offshore Partners plans to hire outsiders to evaluate Brookfield Business Partners' plan to take it private at a discount following shareholder demands that it do just that.
The Vancouver-based, New York-traded company confirmed the move to TradeWinds over the weekend.
"Teekay Offshore's Conflicts committee, consisting only of non-Brookfield affiliated Teekay Offshore directors, will retain advisors and evaluate the proposed offer on behalf of the owners of the non-Brookfield owned limited partnership interests," Teekay Offshore said.
Last week Brookfield, the Toronto private equity firm, announced it was offering $1.05 per share in an attempt to get to 80% ownership, which would trigger a call right, per Securities and Exchange Commission filings.
Brookfield currently owns 73.3% of Teekay's more than 410 million outstanding shares, with warrants to buy 67.9 million more after buying out parent Teekay Corp 30 April. Including the warrants brings Brookfield's ownership stake to 77.1%.
Once it passes the 80% threshold, Brookfield would have the ability to buy all the remaining shares for either the average daily closing price for the last 20 trading days or the highest price paid by the general partner for limited partner shares in the last three months, whichever is greater.
JDP Capital and 16 other shareholders, including Aquamarine Capital and its 1 million share position, have argued the $1.05 offer severely undervalues Teekay Offshore. They say Brookfield should be offering at least $4 per share.
Collectively, the 17 holders own at least 5% of the company's shares.
They urged Teekay to hire a third party to determine its fair value and for Brookfield to disclose what it thinks the company is worth.
Brookfield chief executive Cyrus Madon said the $1.05 offer represented fair value for the remaining shares.
In midday trading Monday, Teekay Offshore shares were trading at $1.16. Since Brookfield bought Teekay Corp's stake, shares have not dipped below $1.05.
