Western Wind mails supplementary directors’ circular and makes no recommendation to shareholders as to whether to accept or reject the Brookfield offer
TSX.V Symbol: “WND”
OTCQX Symbol: “WNDEF”
Issued and Outstanding: 70,462,806
VANCOUVER, Jan. 21, 2013 /PRNewswire/ – Western Wind Energy Corp. – (the “Company” or “Western Wind”) (TSX Venture Exchange – “WND”)
(OTCQX – “WNDEF”) announces that it has mailed a supplementary
directors’ circular (the “Supplementary Directors’ Circular”) in
response to the offer (the “Offer”) from WWE Equity Holdings Inc. (the
“Offeror”), an indirect subsidiary of Brookfield Renewable Energy
Partners L.P. (“Brookfield Renewable”) to Western Wind shareholders to
purchase all of the issued and outstanding shares of Western Wind (the
“Shares”) for $2.50 in cash per Share, upon the terms and subject to
the conditions set forth in the circular of the Offeror dated November
26, 2012 (the “Offeror Circular”).
The Supplementary Directors’ Circular contains NO RECOMMENDATION of the
Western Wind board of directors (the “Board of Directors”) as to
whether shareholders of Western Wind (the “Shareholders”) should accept
or reject the Offer. Shareholders should consider the information
contained in the Supplementary Directors’ Circular carefully and make
their own decisions. Shareholders who are in doubt about how to respond
to the Offer, should consult their investment dealer, stockbroker,
lawyer or other professional advisors.
Reasons for Making No Recommendation
After careful consideration of the risks and opportunities presented by
the Offer, the members of the special committee of the Board of
Directors (the “Special Committee”) found themselves unable to make a
recommendation to Shareholders to accept or reject the Offer.
Ultimately, they concluded, it is a choice that will rest on each
Shareholder’s personal circumstances, appetite for risk and tolerance
On July 30, 2012, the Company announced that it would be seeking a buyer
for the Company and its assets, and that the Board of Directors had
established the Special Committee. On August 10, 2012, the Company
announced that it had engaged Rothschild (Canada) Inc. (“Rothschild”)
as its lead financial advisor to manage and structure a comprehensive
and efficient auction process, with PI Financial Corp. engaged as a
On July 31, 2012, Savitr Capital, LLC announced that it intended to
nominate five new directors for election to the Board of Directors.
All five of management’s nominees were ultimately elected to the Board
of Directors at the Company’s annual general meeting held on September
25, 2012. However, the Company believes that there was at least an
eight week delay in the proper functioning of the auction process due
to the distraction caused by the proxy contest.
After the Company’s annual general meeting held on September 25, 2012,
the Board of Directors again focused on the auction process. The
auction process has since been progressing as planned and as part of
that process, the Board of Directors continues to be in discussions
with potential buyers. However, no binding offer has been made as of
the date of the Supplementary Directors’ Circular. Several of the
parties contacted by Rothschild have executed confidentiality
agreements and conducted due diligence. Initial expressions of interest
were received by the Company, some of which implied a value for the
Company significantly greater than that offered by the Offeror. Seven
parties remain in the process and continue to have access to the data
room. Some of these parties have an interest in an individual asset,
while others are considering an acquisition of the Company as a whole.
Further, the Company is continuing to negotiate non-disclosure
agreements with a small number of qualified parties to gain access to
the data room. If they enter into the auction process, these parties
will likely not be in a position to provide their views on value for
Accordingly, while a financially superior offer may be made before the
expiry of the Offer, the Offer is the only offer to purchase all of the
outstanding Shares that is open for acceptance by Shareholders at the
date of the Supplementary Directors’ Circular. Shareholders who are
attracted by the certainty of an opportunity to sell their Shares for
cash at this time may prefer to accept the Offer. The Board of
Directors does note that the Company’s assets are infrastructure assets
generating power under long term power purchase agreements.
Accordingly, the value of these assets is not expected to be diminished
by the success or failure of the Offer.
On the other hand, Western Wind is an independent renewable energy
production company that owns and operates wind and solar generation
facilities with 165 net megawatts of rated capacity operating in the
states of California and Arizona. Western Wind also owns substantial
development assets for both solar and wind energy in the United States.
See “Western Wind”. On January 2, 2013, Western Wind announced progress
towards bringing the Yabucoa project in Puerto Rico to a financial
close, which will create value for Shareholders. In addition, as part
of the recent “fiscal cliff” package, the United States Congress
approved an extension to a certain federal tax credit for wind power.
In the latter months of 2012, the uncertain fate of the wind tax credit
resulted in depressed valuations of companies in the wind power
industry. Shareholders who sell their Shares now, either in the market
or by accepting the Offer, will forego any opportunity to realize the
value created by the Yabucoa project, which could be significant, as
well as Western Wind’s other projects including any benefit of the
extended federal tax credits for wind power.
In the view of the Special Committee, the decision of a Shareholder to
accept or reject the Offer will be based on the Shareholder’s
individual circumstances, appetite for risk and hope of return.
Accordingly, the Special Committee concluded that the Board of
Directors could not usefully make a recommendation to Shareholders, but
should instead strive to provide Shareholders with all of the relevant
information to allow them to make that decision for themselves.
The Board of Directors adopted the conclusions of the Special Committee
and determined that it would not make a recommendation to Shareholders
whether to accept or reject the Offer.
The following is a summary of the principal reasons why the Special
Committee and the Board of Directors have decided to make NO
RECOMMENDATION with respect to acceptance or rejection of the Offer:
-- Although a financially superior offer may be made before the expiry of the Offer, the Offer is the only offer to purchase all of the outstanding Shares that is open for acceptance by Shareholders at the date of the Supplementary Directors' Circular. -- There are other significant risks and uncertainties related to the Offer, which are described in further detail below. See "Risks Related to the Offer".
Risks Related to the Offer
The Offer is subject to a number of risks and uncertainties, including
but not limited to the following:
1. Western Wind has made submissions to staff of the Ontario Securities Commission in respect of the Offeror's ability to rely on an exemption from the requirement to obtain a formal valuation in respect of the Offer. The Special Committee believes that a formal valuation will benefit all Shareholders in that it will allow them to assess the price offered by the Offeror relative to the fair market value of the Shares as determined by an independent valuator. 2. The Offer is highly conditional to the benefit of the Offeror. There are a number of conditions which are not subject to a materiality threshold or other objective criteria but provide the Offeror with a broad range of grounds upon which it may decline to proceed with the Offer. 3. The Offer is subject to the condition that there be validly deposited under the Offer and not withdrawn at the expiry date of the Offer, Shares representing more than 50% of the outstanding Shares held by Independent Shareholders (as defined in the Offeror Circular). However, the Offeror can waive this minimum tender condition and take up all the Shares tendered, even if the minimum tender condition is not met. If the Offeror acquires less than a majority of the Shares, the Company's ability to effectively carry on its business may be impaired by a poor working relationship with Brookfield Renewable. 4. The purchase of Shares by the Offeror pursuant to the Offer will reduce the number of Shares that might otherwise trade publicly and the number of Shareholders and could, therefore, adversely affect the liquidity and market value of the remaining Shares held by the public. 5. Under the Offer, the Offeror may gain effective control of the Company without any obligation to acquire the outstanding Shares that were not tendered to its bid. This is inherently coercive because a Shareholder may feel compelled to tender Shares to the Offer, even if the Shareholder considers the offer price to be inadequate, to avoid the risk that the Shareholder may be left holding a minority investment at a reduced price reflective of a minority discount and with significantly less liquidity. 6. In the Offeror Circular, the Offeror has advised that if it cannot complete a subsequent acquisition transaction, it will evaluate its alternatives, which may include purchasing Shares in the market, in privately negotiated transactions, in another take-over bid for Western Wind, or otherwise, or taking no further action to acquire additional Shares. Any additional purchases will be at the discretion of the Offeror, and could be at a price greater than, equal to or less than the Offer price.
The foregoing is only a summary of the information and factors
considered by the Special Committee and the Board. This summary is not
intended to be exhaustive. Shareholders should read the entire
Supplementary Directors’ Circular, which includes further details of
the material information, factors and analysis considered by the
Special Committee and the Board.
ABOUT WESTERN WIND ENERGY CORP.
Western Wind is a vertically integrated renewable energy production
company that owns and operates wind and solar generation facilities
with 165 net MW of rated capacity in production, in the States of
California and Arizona. Western Wind further owns substantial
development assets for both solar and wind energy in the U.S. The
Company is headquartered in Vancouver, BC and has branch offices in
Scottsdale, Arizona and Tehachapi, California. Western Wind trades on
the TSX Venture Exchange under the symbol “WND”, and in the United
States on the OTCQX under the symbol “WNDEF”.
The Company owns and operates three wind energy generation facilities in
California, and one fully integrated combined wind and solar energy
generation facility in Arizona. The three operating wind generation
facilities in California are comprised of the 120MW Windstar, the 4.5MW
Windridge facilities in Tehachapi, and the 30MW Mesa wind generation
facility near Palm Springs. The facility in Arizona is the Company’s
10.5MW Kingman integrated solar and wind facility. The Company is
further developing wind and solar energy projects in California,
Arizona, and Puerto Rico.
ON BEHALF OF THE BOARD OF DIRECTORS
Jeffrey J. Ciachurski
President & Chief Executive Officer
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
Certain statements contained in this news release may constitute
forward-looking information under applicable Canadian securities
legislation. These statements relate to future events and are
prospective in nature. All statements other than statements of
historical fact may constitute forward-looking statements or contain
forward-looking information. Forward-looking statements are often, but
not always, identified by the use of words such as “may”, “will”,
“project”, “predict”, “potential”, “plan”, “continue”, “estimate”,
“expect”, “targeting”, “intend”, “could”, “might”, “seek”,
“anticipate”, “should”, “believe” or variations thereof.
Forward-looking information may relate to management’s future outlook
and anticipated events or results and may include statements or
information regarding the future plans or prospects of the Company.
Forward-looking information is based on certain factors and assumptions
regarding, among other things, the Company’s negotiations with
prospective purchasers and the results of due diligence investigations
conducted by prospective purchasers, the Company’s ability to
successfully negotiate non-disclosure agreements with interested
parties, the availability of a financially superior offer, the
Company’s future growth, results of operations, performance, business
prospects and opportunities as well as the economic environment in
which it operates. Several factors could cause actual results to
differ materially from those expressed in the forward-looking
statements, including, but not limited to: actions taken by the Offeror
or Brookfield Renewable, actions taken by the Western Wind Shareholders
in relation to the Offer, the possible effect of the Offer on the
Company’s business, the outcome of the Company’s previously-announced
sale process, the ability of the Company to successfully negotiate
non-disclosure agreements with interested parties, and the availability
of value-maximizing alternatives relative to the Offer. Additional
risks and uncertainties can be found in the Company’s MD&A for the year
ended December 31, 2011 and the Company’s other continuous disclosure
filings which are available at www.sedar.com.
Forward-looking statements and forward-looking information involve known
and unknown risks, uncertainties and other factors that may cause
actual results or events to differ materially from those anticipated.
Forward-looking information is subject to a variety of known and
unknown risks, uncertainties and other factors that could cause actual
events or results to differ from those reflected in the forward-looking
statements including, without limitation: the progress of Western
Wind’s sales process, whether the Company is able to successfully
negotiate the terms of non-disclosure agreements with interested
parties, the results of due diligence investigations conducted by
interested parties, and, assuming the Company receives an expression of
interest, whether a financially superior offer for Western Wind
emerges, whether the Company is able to successfully negotiate a
prospective sales transaction and whether the conditions of any
proposed transaction, including receipt by the Company of all necessary
approvals, are met.
The Board of Directors believes that the expectations reflected in the
forward-looking statements contained in this news release are
reasonable, but no assurance can be given that they will prove to be
correct. Actual results and future events may differ materially from
those anticipated and accordingly forward-looking statements should not
be unduly relied upon. Forward-looking statements contained in this
document speak only as of the date of this news release. Except as
required by applicable law, Western Wind disclaims any obligation to
update any forward-looking information.Page |
SOURCE Western Wind Energy