Brookfield Makes TeeKay Offshore Partners Offer-Update

Canadian Brookfield Business Partners LP has made an offer to purchase the publicly traded units of TeeKay Offshore (NYSE:TOO) that it doesn’t already own. The offer was for $1.05/unit–shares are trading at that level now–no premium in the offer.

Recall last month Brookfield bought the last of the general partners interest in TeeKay thereby controlling the company so this is just a continuation for full ownership.

TeeKay has 3 preferred unit issues outstanding and they popped last month on the Brookfield announcement of the general partners acquisition–then they settle way back. Likely we will see a pop today. Those units are here.

Instead of a pop the TOO units are being sold off hard on delisting concerns–as one said, what a punch in the gut.

16 thoughts on “Brookfield Makes TeeKay Offshore Partners Offer-Update”

  1. Anyone buying KTBA ahead of the upcoming ex-date? Pretty rich at these levels, then again, it is a sock drawer issue.

    COF-P can be bought below par right now. Split IG rating and QDI.

    1. Picked up some KTBA 5/2 @26.75 to catch the upcoming semi-annual dividend. At my entry price I like that it’s non-callable.

  2. The common is toast and most saw that one coming. Question at this point is the preferred. I opened a small position in E during last big sell off and went underwater on that this morning. I added a bit more today near low (so far low) and I would add a bit more if falls enough from that. If Brookfield went through all this to declare bankruptcy that’s it for preferred. I’m betting not.

  3. Poster ‘Biological’ provided this analysis on SA earlier today:

    well,…they stopped common divs many moons ago so there is, since then, no absolutely necessary reason to pay preferred dividends. If they stop paying dividends (it is their prerogative), we are stuck but they’ll accrue and they’ll forever hold an increasing claim on the company (see NM; AF has been trying to clean that albatross for years…). Assuming Brookfield wants to clean up TOO and ultimately IPO’ed it again, or flog it off in a trade sale (or even liquidate it), they would need to clean that up as NO ONE would buy a company with a bunch of busted prefs — or they would, but discount the pref claims from the price. Brookfield is an institutional asset manager of some reputation [not a fly by night or distressed shop] and likely sees the benefits of the prefs (i.e., fixed dividend securities that leverage the common). Whether this means they’ll continue paying, no one knows. Also, they may delist them which can be an issue particularly if they stop paying. Information will be harder to come by — I need to check prospectus.
    20 May 2019, 10:23 AM

  4. I had full positions in all three preferreds and liquidated everything after the announcement last month. Glad I did.

    1. Gee–what a deal–glad I don’t own any. Seems a bit strange that investors would hold share prices up when TOO is a $1 stock–but sell when they “are afraid” of a delisting.

  5. LOL….yeah, a “pop” right in the gut! 🙂 only have 110 of the E class. But still frustrating to see it follow the yellow brick road that Maiden laid.

          1. Ken–not for me for sure–10 years ago I would have taken a small ‘flyer’, but the older I get the less I want to take these speculative positions.

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