Canada’s Inter Pipeline Ltd confirmed on Friday it received an unsolicited takeover bid, but said it was not in talks to sell.
Inter Pipeline’s shares were halted on Friday, after a two-day rally sparked by a report of an offer for the oil pipeline and storage company.
In a statement, the company said it was confirming the offer at the request of the Investment Industry Regulatory Organization of Canada (IIROC).
“Inter Pipeline confirms that it received an unsolicited, non-binding, conditional and indicative proposal to purchase the company but it is not in negotiations with any third party, nor is there any agreement, understanding or arrangement with respect to any such transaction,” it said in a statement.
The company had refused to address the report during its quarterly conference call earlier on Friday.
Shares jumped nearly 9% on Thursday after Canada’s Globe and Mail newspaper reported that the company had received a takeover offer from an unnamed suitor that could be worth C$12.4 billion ($9.37 billion). The Globe reported that Inter Pipeline’s board turned down the cash offer worth C$30 per share.
The stock gained another 3.9% on Friday before the halt, hitting a nearly one-year high of C$24.82 in Toronto.
Trading was set to resume at 3:30 p.m. ET.
The Calgary, Alberta-based company owns pipelines in Alberta and Saskatchewan as well as oil storage tanks in Canada and Europe.
Congested export pipelines forced the Alberta government this year to order curtailments of oil production in the province to drain a glut of crude in storage and support prices. Long delays in approvals to expand export pipelines owned by Enbridge Inc and TC Energy have weighed down the entire Canadian oil sector, and shaken investor confidence.
Inter Pipeline’s business of transporting and storing oil within Canada has been lucrative. It earned record net income of C$260.3 million in the second quarter.
Alberta’s oil inventories have declined from a record high reached in April, but concerns persist about limited transport capacity, creating lucrative opportunities for those with access to storage.
Inter Pipeline announced plans in late 2017 to build the C$3.5 billion Heartland petrochemical plant near Edmonton, Alberta. Funding for the project has hung over the stock, RBC analyst Robert Kwan said in a note.
Inter Pipeline also said on Thursday it was exploring a sale of its European bulk liquid storage business and would use proceeds to reduce debt and fund Heartland. ($1 = 1.3232 Canadian dollars) (Reporting by Rod Nickel in Winnipeg, Manitoba; editing by Steve Orlofsky, Richard Chang and David Gregorio)