TransAlta Corp. has rejected a C$7.8 billion (US$7.75 billion) takeover proposal made by two U.S. private equity firms, LS Power Equity Partners and Global Infrastructure Partners.
TransAlta said its board of directors unanimously decided an offer of C$39 (US$38.76) a share was too low. The directors also determined that talking to the two suitors was not in the best interest of the company and its shareholders.
The U.S.-based firms approached TransAlta with a non-binding proposal to acquire the company’s shares for C$39 each, a 21 percent premium over its closing price on July 18. (HNN 7/23/08) The board said the deal undervalues the Canada-based international utility.
TransAlta owns power plants in Canada, the U.S., and Australia totaling about 8,000 MW; another 540 MW is under development.
The company’s holdings include 13 hydropower plants in Canada ranging from 3 MW to 355 MW, all in Alberta: 13-MW Barrier; 17-MW Bearspaw; 120-MW Bighorn; 355-MW Brazeau; 36-MW Cascade; 51-MW Ghost; 14-MW Horseshoe; 5-MW Interlakes; 19-MW Kananaskis; 15-MW Pocaterra; 50-MW Rundle; 103-MW Spray; and 3-MW Three Sisters.
It also owns two U.S. hydro plants: 1-MW Skookumchuck in Washington and 10-MW Wailuku in Hawaii.
LS Power is affiliated with Luminus Management LLC; the firms already own 9 percent of TransAlta stock.