Brookfield Renewable Energy Partners says it has emerged successful in its hostile bid for Western Wind Energy, ostensibly putting an end to a long, nasty and public takeover battle.
Brookfield says that owners of some 59.7% of Western Wind’s shares have agreed to its C$2.60 ($2.56) per share takeover offer, bringing its total stake in the Vancouver-based developer to more than 66%.
Western Wind owns 154.5MW of wind capacity in California, including the 120MW Tehachapi project in an area of ageing wind farms undergoing significant repowering. In addition, Western Wind owns a 10.5MW combined solar and wind project in Arizona, and is developing a consented 30MW PV array in Puerto Rico.
The shares Brookfield has agreed to buy are worth about C$92m, and the company will keep the offer open until 7 March to continue attracting other sellers.
In November Brookfield, which is listed in Canada and the US, and owns 5.6GW of mostly hydro generation capacity, made a cash offer for Western Wind of C$2.50 per share – a 110% premium on the company’s closing price on 27 July 2012, when it announced its sale process.
On 24 January the company “terminated” its friendly discussions with Western Wind, saying it appeared that “the company, and in particular its CEO (Jeff Ciachurski), [had] no intention of selling”.
Four days later Brookfield upped its bid to $2.60 per share, and since then a flurry of mutually antagonistic press releases have been published by both companies.
Shares in Western Wind have risen significantly since it initially put itself on the auction block last summer, trading as high as C$2.81 in early February. But the last time the shares traded above C$2.60 was on 21 January, lending an increasing sense of inevitability to Brookfield's offer.
Many observers believed the share price would collapse if Brookfield walked away from its takeover bid.
Shares closed at C$2.46 on 21 February. Western Wind’s management has maintained that the company is worth at least C$3.00 per share.
Brookfield’s acquisition of Western Wind will boost its wind capacity in California by 56%, bringing it to nearly 430MW.
“We are very pleased with the successful outcome of our bid and look forward to incorporating these complementary energy assets into our renewable-power portfolio,” says Brookfield chief executive Richard Legault.
Brookfield says it has written to the Western Wind board of directors requesting an “orderly transition”.