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Shares in Inter Pipeline Ltd. fell by as much as 4.3 per cent Monday morning after soaring late last week on news that it had rejected an unsolicited takeover from an unnamed bidder.

On the Toronto Stock Exchange, shares in the Calgary petroleum transportation and processing company fell by $1.06 to $23.75 before recovering to $24.10 by 11 a.m. EDT.

During a conference call Friday to discuss second-quarter results, company executives refused to comment on a Globe and Mail report that cited unnamed sources regarding a $30-per-share cash offer.

In mid-afternoon, however, after trading was halted, Inter issued a brief statement confirming there had been "an unsolicited, non-binding, conditional and indicative proposal," without giving any details about the date, price or the identity of the bidder.

RBC Dominion Securities analyst Robert Kwan speculated in a report that the bidder is likely a private entity with access to project funding at a lower cost than through public markets.

He said it seems unlikely that a peer would bid for Inter, given negative public market sentiment towards its funding plan for the $3.5-billion Heartland Petrochemical Complex it is building northeast of Edmonton.

"It remains to be seen if this party approaches the board again," the report notes.

"If the board does not engage, we see uncertainty with respect to whether the party is willing to make an unsolicited offer as: (1) the party may not be willing to take on the stigma of a hostile bid; and (2) presumably the party sees value in HPC and with the project under construction, management being distracted with the bid could jeopardize the timing and cost of the HPC construction."