TransCanada's Columbia Pipeline Group to Acquire Columbia Pipeline Partners (CPPL) for $17/Share

November 1, 2016 4:21 PM EDT

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Columbia Pipeline Partners (NYSE: CPPL) announced that it has entered into a definitive agreement and plan of merger with Columbia Pipeline Group, Inc. (Columbia) pursuant to which Columbia will acquire, for cash, all of the outstanding common units of the Partnership, at a price of US$ 17.00 per common unit for an aggregate transaction value of approximately US$915 million. Columbia is a wholly-owned subsidiary of TransCanada Corporation (NYSE: TRP).

The price represents an increase of US$1.25 or eight per cent per unit when compared to the offer of US$15.75 per common unit made by Columbia on September 25, 2016.

In addition, until the closing of the merger, unit holders of the Partnership will continue to receive regular quarterly distributions of $0.1975 per unit, and at closing, holders of the Partnership's common units will be paid a pro-rated distribution for any partial period to the closing date.

As the general partner of the Partnership is an indirect wholly-owned subsidiary of Columbia, a committee composed of the independent directors of the board of directors of the Partnership's general partner (the Conflicts Committee) was formed to consider Columbia's offer. The Conflicts Committee approved the merger agreement and determined that the merger agreement and the merger transactions are fair and reasonable to and in the best interests of the Partnership and the holders of the Partnership's common units unaffiliated with Columbia entities. Based on the recommendation of the Conflicts Committee, the board of directors of the Partnership's general partner approved the merger agreement and recommended that the Partnership's unitholders approve the merger.

The merger is expected to close in the first quarter of 2017, and is subject to satisfaction of certain conditions, including the approval of the merger agreement and the transactions contemplated thereby by (1) a majority of the outstanding Partnership common units, voting as a class, (2) a majority of the outstanding Partnership common units held by unitholders unaffiliated with Columbia entities, voting as a class, and (3) a majority of the outstanding Partnership subordinated units, voting as a class. Columbia indirectly owns 100% of the subordinated units and has delivered a written consent approving the merger and the transactions contemplated thereby. Upon closing of the merger, the Partnership will be an indirect wholly owned subsidiary of TransCanada and will cease to be a publicly held partnership.

Jefferies LLC acted as financial advisor to the Conflicts Committee. Akin Gump Strauss Hauer & Feld LLP and Potter Anderson & Corroon LLP are serving as legal counsel to the Conflicts Committee.

TransCanada retained Morgan Stanley to act as its financial advisor and Vinson & Elkins LLP to act as its legal advisor.

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