The Canadian Competition Bureau has given TransAlta an Advance Ruling Certificate that means it sees no obstacle to the takeover bid.
Canadian Hydro Developers has 694MW of net capacity in operation, 185MW nearing completion, and 1624MW in development including the 100MW Dunvegan run-of-river project.
TransAlta offered Can4.55 (US$) per share on 7 July. In late July however, the Board of Canadian Hydro Developers recommended that the offer be rejected, and has now issued a Circular to shareholders with a list of reasons, including the offer: being conditional and not firm; poorly valuing current value and growth prospects; not being permitted under the Shareholder Rights Plan; being below premiums typically paid in Canadian takeovers; and, having opportunistic timing.
However, TransAlta has effectively dismissed the Circular as containing ‘little new information’ and maintains that its offer is a ‘significant premium’ on the stock trading prior to the bid.
Canadian Hydro Developers said its Board was unanimous and ‘adamant’ in recommending that shareholders reject the takeover offer, and that other opportunities were being pursued.
In a statement, the Board chairman, Dennis Erker, said: ‘We are actively pursuing other alternatives and we are encouraged by the level of interest.’
TransAlta wants the restrictions of Shareholder Rights Plan to be removed and the Alberta Securities Commission (ASC) is to consider the application on 24 August. Removing the Plan would allow the offer to be taken up.
Canadian Hydro Developers said it is in a financially sound position, needing no loans until late next year nor equity contributions for current projects until 2012.
TransAlta is making the takeover offer via a specially formed, wholly-owned subsidiary 1478860 Alberta Ltd.
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