TransAlta receives regulatory approval to acquire Canadian Hydro Developers

Update on August 18, 2009:

TransAlta Corporation, a power generation, has received clearance from the Canadian Competition Bureau to acquire all of the issued and outstanding common shares of Canadian Hydro Developers, Inc., a developer, owner, and operator of renewable power generation plants. Both the companies are based in Canada.

Update on July 23, 2009:

The Board of Directors of Canadian Hydro unanimously recommends the company's shareholders to reject the unsolicited takeover offer from TransAlta.

The Board believes that the offer is inadequate and contrary to the interests of Canadian Hydro and its shareholders.

Update July 22, 2009:

TransAlta, through its wholly-owned subsidiary 1478860 Alberta, Ltd., has commenced its offer to acquire all of the issued and outstanding common shares of Canadian Hydro.

The offer is scheduled to expire on August 27, 2009 unless withdrawn or extended.

Announcement (July 20, 2009):

TransAlta, through an acquisition entity, is planning to acquire all of the issued and outstanding common shares of Canadian Hydro at a price of CAD4.55 ($4.08) per share in cash. The transaction is valued at approximately CAD654 million ($591.39 million).

The offer price represents a premium of approximately 30% to the volume weighted average trading price of Canadian Hydro common shares for the past 10 trading days and approximately 25% to the closing price of Canadian Hydro common shares on July 17, 2009.

Royal Bank of Canada is providing debt financing for the transaction.

TransAlta expects to commence the offer on July 22, 2009. The offer will be open for acceptance for a period of 36 days and will expire on August 27, 2009 unless extended or withdrawn.

The Goldman Sachs Group, Inc. and RBC Capital Markets are acting as financial advisors, while Burnet, Duckworth & Palmer, LLP is acting as legal advisor to TransAlta. FirstEnergy Capital Corp. and Societe Generale S.A. are acting as financial advisors, while Blake, Cassels & Graydon LLP is acting as legal advisor to Canadian Hydro. Laurel Hill Advisory Group is acting as information agent to Canadian Hydro.

Deal Value (US$ Million) 591.39
Deal Type                Acquisition
Sub-Category             100% Acquisition
Deal Status              Announced: 2009-07-20

Deal Participants

Target (Company)   Canadian Hydro Developers, Inc.
Acquirer (Company) TransAlta Corporation

Deal Rationale

The transaction would enable TransAlta to enhance its position as a major provider of renewable energy in Canada. The transaction further enhances TransAlta's renewable energy portfolio.

Bid Premium ($ per share) 25

Related terms: acquisition, advisor, alberta, bank, canada, debt, legal, renewable energy, takeover