US bidder speaks with Ascendant shareholders
Representatives of the US firm trying to buy out Ascendant Group have been in Bermuda this week, answering questions from the Bermuda company’s shareholders.
Their visit comes in the run-up to Ascendant’s annual shareholders meeting on Friday.
The Royal Gazette revealed two weeks ago that Twenty First Century Utilities had tabled a bid and that it was rejected by the board of Ascendant, parent company of power utility Belco.
The day the story was published Ascendant announced in a filing with the Bermuda Stock Exchange that its board had received an “unsolicited, highly conditional, expression of interest” from TFC Utilities, but it had decided not to pursue it after taking legal and financial advice.
The news prompted Ascendant shareholders to seek more information on what had been offered, said Joe Garcia, senior adviser on TFC’s management team — hence he visited the island this week to speak with some of them.
Dennis Lister, Speaker of the House of Assembly, also confirmed his involvement with TFC’s interest in Ascendant — a link that had been suggested by sources cited by The Royal Gazette in an article last November.
Mr Lister, who has long held an interest in the application of green technologies in Bermuda, said he had approached TFC two years ago and urged the Washington, DC-based firm to take a look at the island’s energy market.
Mr Garcia said yesterday that the all-cash bid had been for $15 per share, a near 50 per cent premium to Ascendant’s price on the BSX at the time of the offer about five weeks ago.
“We’re over here to make sure that people know and understand that we did make an real offer, a cash offer for all the shares, a fully funded offer,” Mr Garcia said.
“The reason that we’re here now is that shareholders asked us to explain what the offer was and to understand more about it.”
Mr Garcia, a former US Congressman who has served on America’s National Association of Regulatory Utility Commissioners, declined to say whether TFC was lining up another bid. He added that the company would have no representation at tomorrow’s Ascendant shareholder meeting.
What happens next with the utility would be “a decision for Bermudians”, Mr Garcia added.
Based on the number of shares outstanding quoted by the BSX, the offer valued Ascendant at about $153 million and was fully funded, with backing from Fortress Investment Group, a New York-based investment house with more than $43 billion of assets under management.
Fortress, which was last year bought out by Japanese technology giant Softbank, has also been appointed manager and general partner of the Bermuda Infrastructure Fund, an entity set up last November with the target of raising $100 million from Bermudian-based insurance companies to fund island infrastructure projects.
Mr Lister and Mr Garcia stressed that Fortress’s work with the infrastructure fund and the money in the fund was entirely unconnected with the bid for Ascendant Group.
Mr Garcia said TFC’s approach was based on investing in energy efficiency and renewables, creating a decentralised grid that was shaped by the preferences of customers.
He was confident that such an approach could be successful in Bermuda and bring down electricity prices and produce cleaner power.
Over the past two years, TFC has met with regulators and government officials, among other interested groups, to discuss its interest in the electricity sector in Bermuda and its ideas.
Belco has been given the go-ahead by the Regulatory Authority to build the North Power Station to install new, more efficient generators to replace decades-old engines at its Pembroke plant.
The utility has put forward its energy vision for the next 20 years in its Integrated Resource Plan Proposal, with several suggested scenarios and a preferred option based on a switch to natural gas as the principal generating fuel, growth in the contributions from renewables and an energy efficiency drive.
The Regulatory Authority is seeking public feedback on the IRP proposal, with the 60-day consultation period running through July 2. Mr Garcia said TFC had no plans to make a submission to the RA.
Ascendant’s annual meeting will start at 9.30am tomorrow at the Bermuda Underwater Exploration Institute.
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