Canadian Hydro seeks better deal, pursues new projects

Canadian Hydro Developers Inc. says it is big enough to pursue large renewable power projects on its own and has no need for an “inadequate” takeover bid from TransAlta Corp.

In July 2009, TransAlta made an unsolicited offer to buy Canadian Hydro for C$4.55 (US$4.13) a share. The attempted takeover came after both companies failed to reach a deal earlier in 2009. (HydroWorld 7/23/09)

During a conference call Aug. 14, 2009, with investors, Canadian Hydro CEO Kent Brown said: “We’ve successfully doubled the size of our company, despite the worldwide economic downturn and we look forward to reaping the benefits of our growth.”

The growth will produce positive quarter-over-quarter gains through 2009 and 2010 and generate enough free cash flow to fund the equity portion of developing one 100-MW project annually, Brown said.

The company continues to urge its shareholders to reject the TransAlta bid, saying it is opportunistic and inadequate. The company’s largest shareholders have said they are interested in the bid, Brown said, and would need a “much, much higher” offer to tender their stock.

Canadian Hydro is waiting for a better offer. It has opened a data room, which provides confidential corporate information to potential buyers in hopes of attracting a higher offer.

Meanwhile, the company is moving forward with new power projects. The Dunvegan hydroelectric project in Alberta will advance, as the company seeks construction permits and an investment partner, Brown said.

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