U.S. activist investors nominate TransAlta directors to stymie Brookfield deal
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U.S. activist investors nominate TransAlta directors to stymie Brookfield deal

A woman walks towards the entrance of the TransAlta headquarters building in Calgary on April 29, 2014. THE CANADIAN PRESS/Larry MacDougal

CALGARY — U.S. activist investors trying to use their stake in TransAlta Corp. to force change are nominating five new directors to the company’s board in an effort to interrupt a $750-million investment in the power utility.

Cove Key Bluescape Holdings announced March 18 it had partnered with Bluescape Energy Partners and Mangrove Partners to use their combined 10 per cent stake to press for changes that will increase the value of the Calgary utility’s shares.

Calgary-based TransAlta announced on Monday that Brookfield Renewable Partners and its institutional partners had signed a $750-million deal to invest in the company’s hydro assets, adding Brookfield would also purchase shares to increase its stake to nine per cent.

TransAlta said it would include two Brookfield nominees, Harry Goldgut and Richard Legault, on its slate of directors for election at the upcoming 2019 annual shareholders’ meeting.

Late Monday, TransAlta said it had received notice that Mangrove Partners intends to nominate five candidates for election as directors at its upcoming annual shareholders meeting.

Cove Key says the nominations were made to ensure that shareholders can elect two or more directors that aren’t on the recommended slate of nominees, thus putting in place means to terminate the Brookfield deal under terms of that agreement.

It says the partnership hasn’t had time to fully evaluate the Brookfield investment, but it believes better deals may be available and the company should keep its options open.

TransAlta plans to use $350 million of the Brookfield money to speed the company’s coal-to-gas transition strategy and up to $250 million to buy back shares over three years.

 

Companies in this story: (TSX:TA, TSX:BEP.UN)

The Canadian Press

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