• Pembina to increase monthly dividend rate from $0.130 to $0.135 per share upon
• Pembina will be the surviving entity with a combined executive team from both
Pembina and Provident management
• Pembina will assume all the rights and obligations of Provident’s unsecured
o 5.75% maturing December 31, 2017
o 5.75% maturing December 31, 2018
• Provident will suspend its premium dividend reinvestment plan
• Major near-term projects include:
o Saturn and Resthaven liquids extraction facilities
o Peace NGL pipeline expansion
o Redwater liquids storage development
o Redwater fractionator capacity expansion
• Pro forma 2011 senior debt to EBITDA at approximately 2.4x
• $100 million break fee
o Pembina has the right to match any competing offers
• Required approvals:
o Canadian Competition Act
o 66.67% approval from Provident shareholders
o >50% approval from Pembina shareholders
o Other customary approvals
• Pembina intends to list on the NYSE
I e-mailed Pembina about this and the response is below. Also US stock holders cannot join DRIP until it listed on the NYSE, but they will get cash dividends.
Upon closing of the proposed transaction, you would receive regular monthly dividends from Pembina Pipeline Corporation. At present, Pembina’s DRIP does not provide for the participation of US residents, but that is subject to change going forward. Pembina will likely investigate amending its DRIP to allow for US residents to be eligible to participate after receiving approval to proceed with the proposed listing of Pembina’s securities on the NYSE.
If you have any further questions, please feel free to contact me.
Hayley Nelson - Analyst, Investor Relations
Pembina Pipeline Corporation | 3800, 525 - 8th Avenue S.W. Calgary, AB T2P 1G1
Tel: (403) 231-7404 | Cell: (403) 519-5049 | email@example.com
Canadian and U.S. Tax Considerations for Provident Shareholders
The Arrangement Agreement has been structured to allow Provident shareholders to receive Pembina shares generally on a tax-deferred basis for Canadian income tax purposes. In addition, the Arrangement Agreement has been structured so that the Arrangement will qualify as a tax-free transaction for U.S. federal income tax purposes. If the Arrangement qualifies as a tax-free transaction, Provident shareholders who receive Pembina shares will not be required to recognize gain and will not be permitted to recognize loss. However, there can be no assurance that the U.S. Internal Revenue Service will not challenge the treatment of the Arrangement as a tax-free transaction.
About the Transaction
I guess we get the security on the pink sheets line, though I am not sure. I hold PVX in an IRA, so it won't matter if I sell or take the stock, but I was in a taxed account I would prefer to move into stock if possible.