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TC PipeLines Recommends Unitholders Vote for the Merger with TC Energy

Source: www.gulfoilandgas.com 2/22/2021, Location: North America

TC PipeLines, LP (TCP) (the Partnership or TC PipeLines) reiterated its support of the pending merger with TC Energy Corporation (TSX, NYSE: TRP) (TC Energy).

In reaffirming its support of the pending merger, the Partnership notes that:

- TC PipeLines unitholders will benefit from a more stable, diversified and attractive value creation opportunity in TC Energy: TC PipeLines unitholders will become TC Energy shareholders, providing the opportunity to participate in the growth of the post-merger company. TC Energy’s valuation has proven to be more resilient during the recent challenging environment than that of TC PipeLines.

- The transaction is expected to enhance potential growth for the Partnership: TC Energy has greater access to capital, including a larger North American investor base, relative to master limited partnerships. As a result, the transaction is expected to enhance potential growth of the Partnership’s suite of assets.

- TC PipeLines’ future outlook is negatively impacted by recent market conditions and changes in the regulatory regime: Regulatory changes have presented negative implications for the long-term growth and financial outlook of TC PipeLines. Specifically, growth via asset dropdown is not expected to resume due to the lack of capital market access and lower than historical valuations experienced by TC PipeLines and the midstream sector in general. As a result, TC PipeLines will be solely reliant on the earnings potential of existing assets.

- TC PipeLines’ Conflicts Committee conducted a thorough process: The Conflicts Committee met with its financial and legal advisors frequently over a two-month period. The substantial negotiations between the Conflicts Committee and TC Energy led to an increase in the exchange ratio to 0.70x from TC Energy’s initial offer of 0.65x, representing an increase in the exchange ratio of 7.7%.

The proposed transaction simplifies TC Energy’s corporate structure, improves transparency, provides anticipated cost savings and other efficiencies and creates a stronger company without conflicts of interests between TC Energy and TC PipeLines.

EVERY VOTE IS IMPORTANT – UNITHOLDERS ARE URGED TO VOTE “FOR” THE PROPOSED MERGER WITH TC ENERGY.

Institutional Shareholder Services and Glass Lewis & Co., the two leading independent proxy firms, have both recommended that TC PipeLines’s unitholders vote “FOR” the approval of the merger agreement with TC Energy.

TC PipeLines reminds unitholders of the upcoming special meeting of unitholders to vote on the merger, which will be held at 10:00 a.m. (Central Time) on February 26, 2021. The Partnership expects the transaction to close shortly following receipt of unitholder approval. TC PipeLines has received all regulatory approvals required to complete the transaction.

Unitholders who have not already voted their units are encouraged to vote FOR the merger as soon as possible and should contact Morrow Sodali, the Partnership’s proxy solicitor, by calling toll-free at (877) 787-9239 or by sending an email to TCP@investor.morrowsodali.com if they need any assistance.

Evercore is acting as exclusive independent financial advisor and Kirkland & Ellis LLP is acting as independent legal advisor to the Conflicts Committee.

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