Ascendant shareholders urged to back deal

  • In favour: Peter Durhager, chairman of Ascendant, is urging shareholders to vote for a takeover by Algonquin  (File photograph by Akil Simmons)

    In favour: Peter Durhager, chairman of Ascendant, is urging shareholders to vote for a takeover by Algonquin (File photograph by Akil Simmons)

Shareholders of Ascendant Group Ltd are to meet on August 9 to vote whether to approve the sale of the company to Canadian utility group, Algonquin Power&Utilities Corporation.

Ascendant, which owns Belco among other interests, has accepted a takeover bid from Algonquin worth around $365 million. The sale is subject to shareholder and regulatory approval.

Under the deal, shareholders would receive $36 a share, representing a premium of 20 per cent over yesterday’s closing share price of $30 per share, which was up by $5.99. or 24.9 per cent, on the day. Ascendant shares traded at $22 on June 3, the day the deal was announced.

The company’s board of directors has voted unanimously in favour of accepting the bid. In a letter sent to shareholders, board chairman Peter Durhager has encouraged shareholders to approve the transaction. A two-thirds vote is needed for approval.

In the letter, Mr Durhager wrote: “The board proposes a sale of the company. The board evaluated all of the strategic alternatives that would achieve the main objective of delivering the greatest positive impact for all our stakeholders.

“For you, our shareholders, the board sought to deliver an excellent return on your investment in Ascendant.

“For our customers, the board had to ensure long term stability of electricity prices with a clear path to reducing these prices over time.

“For our employees, the board’s goal was to enable continuity of employment as well as growth and advanced learning opportunities in their jobs.

“And, for the community, it meant integrating more renewables, conservation and battery storage into Bermuda’s energy mix.”

Algonquin, Mr Durhager wrote, “is positioned to deliver on Bermuda’s energy future. Algonquin is a diversified generation, transmission and distribution utility with approximately US$10 billion of total assets and a market capitalisation of US$5.5 billion.

“Through its two business groups, Algonquin provides rate-regulated natural gas, water, and electricity generation, transmission, and distribution utility services to approximately 800,000 connections in North America and is committed to being a global leader in the generation of clean energy through ownership of or investments in long-term contracted wind, solar and hydroelectric generating facilities representing over two gigawatts of installed capacity.

“Algonquin delivers continuing growth through an expanding pipeline of renewable energy, electric transmission, and water infrastructure development projects. It also maintains a global focus and aims for organic growth within its rate-regulated generation, distribution and transmission businesses and pursues accretive acquisitions.”

The Ascendant website provides information about how the deal would impact employees, customers, and the island generally.

For employees, the site says, Ascendant “will introduce advanced training opportunities, both locally and overseas, and are committed to no company-initiated job cuts”.

For customers, “Algonquin plans to integrate additional low-cost renewable energy into Belco’s supply mix, which is expected to lower electricity costs”.

For Bermuda, “Algonquin and Belco will continue to collaborate with the Regulator to implement the IRP. They are committed to accelerating the introduction of renewables, conservation, and battery storage”, the website says.

In the letter to shareholders, Mr Durhager added: “The board unanimously concluded and recommends to the shareholders that the offer of $36 per share is a tremendous opportunity for shareholders to realise the value of their investment.

“Ascendant’s directors, management and other insiders (as such term is defined in the Bermuda Stock Exchange Listing Regulations) representing a total of 2,055,260 shares (22 per cent of all issued and outstanding shares of the company) have expressed their intention to vote in favour of a sale to Algonquin.”

He added: “This is one of the most important decisions the shareholders of Ascendant will ever make.”

The meeting will be held at 9.30am in the Harbourview Ballroom at the Fairmont Hamilton Princess Hotel&Beach Club.

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Published Jul 24, 2019 at 8:00 am (Updated Jul 24, 2019 at 8:22 am)

Ascendant shareholders urged to back deal

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