Western Wind Rises With Company for Sale: Vancouver Mover

July 30, 2012 by  
Filed under Green Energy News

Western Wind Energy Corp. (WND), a
Canadian renewable-energy developer with projects in the western
U.S., rose the most in nine months after the company said it was
for sale.

Western Wind jumped 50 percent to C$1.78 at the close in
Toronto, the biggest gain since Oct. 11. Prior to the sale
announcement yesterday, the shares had fallen 41 percent this
year.

The company, which rejected a C$2.50-a-share takeover bid
last year, will choose two final advisers to manage and
administer the sale process within 10 days, Vancouver-based
Western Wind said in a statement. The company is selling now to
relieve “consistent suffering” its shareholders have endured
as the stock price fell more than 50 percent from a 52-week high
after the October bid.

The board said it sees a sale price between the C$2.50
offer and the more than C$5 value that DAI Management
Consultants Inc. gave to the company. Potential buyers may be
energy companies interested in U.S. tax benefits Western Wind
has accumulated during construction of its projects, Chairman
Michael Boyd said in a phone interview today. Developers of wind
energy get a tax credit of 2.2 cents for each kilowatt-hour of
power they generate.

Algonquin Power Utilities Corp. (AQN) scrapped its bid in
October after Western Wind said it “undervalued” the company
by at least half. Boyd said he didn’t see another bid from
Oakville, Ontario-based Algonquin.

Wind Projects

“They are a Canadian-based company that would seem to not
be able to realize significant value in” Western Wind, Boyd
said.

Western Wind owns and operates three wind projects in
California totaling 154.5 megawatts and one 10.5-megawatt
combined wind-and-solar plant in Arizona. The company plans to
continue developing a project in Puerto Rico that will be
included in the sale, according to the statement.

The company was awarded a $78.3 million U.S. grant on July
10 after applying for $90.5 million under the Treasury
Department’s 1603 cash grant program.

“It’s a difficult situation because the stock has fallen
so much,” said John McIlveen, a Toronto-based analyst with
Jacob Securities Inc. who rates the stock a buy. The company’s
“fundamental value” is C$2.50 a share, “but now you’re in an
auction process.”

To contact the reporters on this story:
Justin Doom in New York at
jdoom1@bloomberg.net;
Divya Balji in Toronto at
dbalji1@bloomberg.net

To contact the editor responsible for this story:
Reed Landberg at
landberg@bloomberg.net

Comments are closed.