LATEST NEWS 
October 8, 2009
Canadian Hydro accepts TransAlta’s $755M takeover offer
CALGARY
A prolonged stalemate in TransAlta Corp.’s battle to take over green energy producer Canadian Hydro Developers Inc. ended Oct. 5, with the two Calgary-based firms reaching a tentative agreement on a $755-million deal.
The deal is a more than 15 per cent improvement to TransAlta’s original $654-million hostile bid for Canadian Hydro, which has wind, hydroelectric and biomass-fired plants across Canada.
TransAlta sat down with Canadian Hydro over the past few days and managed to pin down more clearly how much the renewable energy firm is worth, TransAlta chief executive Steve Snyder said of the agreement.
“There’s hundreds of details that give you confidence that the value you see on the surface is actually there, and that just takes some time,” he said in an interview.
“And it requires some sitting down and talking to people eyeball to eyeball to get the answers.”
The boards of both companies they support the deal and for the first time, Canadian Hydro encouraged its shareholders to accept the offer.
Canadian Hydro Developers currently operates 694 megawatts of wind, hydro and biomass power plants in Alberta, Ontario, Quebec and British Columbia. It also has 252 megawatts of advanced development projects in western and eastern Canada.
Combined, TransAlta and Canadian Hydro Developers would have net generation capacity of 8,657 megawatts in operation, primarily from coal-fired plants.
TransAlta, which is highly dependent on coal-fired generators for its electricity production, has been on a quest to beef up its green portfolio with environmental regulations expected to become increasingly stringent.
The companies combined are well positioned to become a North American leader in renewable energy, Snyder said.
“We believe this transaction delivers certain and fair value to Canadian Hydro shareholders while providing TransAlta shareholders with both near and long-term value,” said Snyder.
“It also accelerates the expansion of TransAlta’s renewable portfolio and will open the door to new and exciting opportunities for employees of both companies.”
Renewable energy will make up 22 per cent of the combined company’s portfolio, with 1,900-megawatts in operation. There are also 543-megawatts under construction and nearly 500-megawatts in advanced-stage development.
Canadian Press
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