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Columbia Pipeline Partners shares fly after TransCanada buy offer

Crude oil pipeline being constructed by TransCanada Corp. in Atoka, Okla.
Daniel Acker | Bloomberg | Getty Images

Shares of Columbia Pipeline Partners closed nearly 5 percent higher on Monday after TransCanada said its unit, Columbia Pipeline Group, offered to buy it for $848 million in cash.

Calgary, Alberta-based TransCanada said it would offer $15.75 per common unit, an 11.3 percent premium to Columbia Pipeline Partners' 30-day average closing price as of Sept. 23.

In July, TransCanada completed its $10.3 billion takeover of Columbia Pipeline Group.

As the general partner of Columbia Pipeline Partners is an indirect wholly owned subsidiary of Columbia Pipeline Group, a committee composed of the independent directors of the Columbia Pipeline Partners' board will be formed to consider the offer pursuant to its processes, TransCanada said.

The closing of any deal would require approval by a majority of Columbia Pipeline Partners' common unit holders and is conditioned upon regulatory approval under the Hart-Scott-Rodino Antitrust Improvements Act, TransCanada said.

Even with Monday's gains, Columbia's stock is down more than 8 percent year to date.

CPPL 2016 chart

— Reuters contributed to this report.