VANCOUVER – Western Wind Energy Corp. (TSXV:WND) shares soared nearly 60 per cent Tuesday after the company said it has received a “low-ball” $ 131.5 million takeover bid from Algonquin Power and Utilities (TSX:AQN),
After an early trading halt, Western stock jumped 77 cents to close at $ 2.10 in trading of 1.9 million shares on the junior TSX Venture Exchange.
The price beat the alternative power company’s previous 52-week high of $ 1.78 a share.
The Algonquin bid of $ 2.50 in cash or cash and shares is nearly double the previous market price for the Vancouver-headquartered company, which operates wind turbines in California and develops projects elsewhere.
In a later statement, Algonquin confirmed it provided “a non-binding expression of interest in engaging in discussions” with Western Wind.
But the deal depends on a substantial due diligence review by Algonquin, a definitive deal between the two companies and approval by the Algonquin board — none of which have been completed.
“It is now up to Western Wind’s board of directors to initiate an appropriate process to provide access for any interested party to perform a due diligence review.,” Algonquin said.
Western Wind said Tuesday it has had two independent valuations of its major assets, including one from DAI Consulting, that estimated the company was worth $ 5.06 per share.
Part of that valuation is based on more than $ 300 million in tax reductions that would be available to a large, taxable U.S. entity that wouldn’t be available to Algonquin, Western Wind said.
“Western Wind Energy’s management strongly recommends that its shareholders ignore Algonquin’s low ball offer and for all shareholders to clearly study and analyze the Algonquin financial statements,” Western Wind said in a statement.
Algonquin, which has its headquarters in Oakville, Ont., is also focused on renewable forms of electricity generation as well as power and water utilities, including through its U.S. subsidiary Liberty Utilities Co.
It hasn’t announced details of its offer to Western Wind and its spokesperson couldn’t immediately be reached for comment.
Western Wind said it’s also about to go online with its 120 megawatt Windstar project in California, which will provide significant returns for shareholders “well above the Algonquin offer.”
Local news from metronews.ca/vancouver
About The Reporter
