TransAlta, Canadian Hydro Agree to Acquisition Price

TransAlta Corporation (TSX: TA; NYSE: TAC) and Canadian Hydro Developers, Inc. (TSX: KHD) announced they have agreed to a purchase price for all of the issued and outstanding common shares of Canadian Hydro.

TransAlta amended and earlier offer of C$4.55 per share to C$5.25 per share in cash. The Amended Offer, which has a total value of approximately C$1.6 billion, is said to have the unanimous support of the Boards of Directors of both companies.

TransAlta President and CEO Steve Snyder said, “We are very pleased to have the support of the Canadian Hydro Board of Directors for this transaction. Together, our two companies will have unparalleled operational and development expertise, a robust growth portfolio, a strong balance sheet and will be well positioned as a North American leader in renewable energy.”

On a combined basis, TransAlta and Canadian Hydro will have net generation capacity of 8,657 megawatts (MW) in operation. The renewables portfolio will include 1,900 MW in operation, or 22% of the combined portfolio. In addition, there are 543 MW under construction and nearly 500 MW in advanced-stage development.

The Amended Offer is subject to certain conditions, including the acquisition by TransAlta of at least 66 2/3% of the outstanding Canadian Hydro common shares.

TransAlta has also entered into lock-up agreements with each of the directors and officers of Canadian Hydro. Under the lock-up agreements, each locked-up shareholder has agreed to tender all of his or her Canadian Hydro common shares to the Amended Offer.

The transaction will be funded initially with new committed bank facilities fully underwritten by Royal Bank of Canada, which, along with existing credit facilities and internally generated cash, will provide ample funding to take up and pay for all the outstanding Canadian Hydro shares. This initial funding will be replaced with permanent long-term funding in the debt capital markets, underpinned by raising C$350 – C$400 million of equity.

The transaction will not impact TransAlta’s dividend policy the company said.

TransAlta’s focus is to efficiently operate its diversified fleet of geo-thermal, wind, hydro, natural gas and coal-fired facilities in order to provide its customers with a reliable, low-cost source of power.

Canadian Hydro claims to be the largest and most diversified developer, owner, and operator of renewable energy generation facilities in Canada totaling net 694 MW of capacity in operation, 160 MW in and nearing construction, and 6,060 MW in development. The renewable generation portfolio is diversified across three technologies (water, wind, and biomass) in the provinces of Alberta, British Columbia, Ontario, and Quebec.

Last weak Canadian Hydro announced a deal to acquire rights to a 4,400 MW offshore wind farm in one of the Great Lakes bordering Ontario.

Website: http://www.transalta.com/     
(Visited 6,879 times, 2 visits today)

Post Your Comment

Your email address will not be published. Required fields are marked *