The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Brookfield Renewable Energy Likely To Vote Against Western Wind Management in Proxy Battle

When it emerged that Brookfield Renewable Energy Partners ("Brookfield", TSX:BRP.UN, OTC: BRPFF) had acquired approximately one sixth of Western Wind Energy's (TSXV:WND, OTC:WNDEF) stock last Thursday from Western Wind's largest institutional shareholder, Goodman & Company, investors cheered.

The transaction was seen as a signal that Brookfield intends to bid at least C$2.25 for Western Wind in its upcoming sale, and so the company’s stock has been trading for slightly more than C$2.25 since the announcement.

Despite this, the Brookfield/Goodman transaction may not prove to be a good deal for Western Wind’s other shareholders.  Goodman had not said how it intended to vote in the upcoming proxy battle between Western Wind’s management and 4.78% owner Savitr Capital.  The main issue in this proxy battle is which team is best suited to manage the process of selling the company.

Because the purchase comes with a promise from Brookfield to compensate Goodman if Western Wind is sold for more than C$2.25 in the next year, the transaction only makes sense if Brookfield intends to use its newly acquired votes to influence the vote in its favor.  As a likely bidder in the sale, Brookfield’s incentive is to vote for the management team which it believes will accept the lowest offer for Western Wind.  Savitr has stated that Western Wind management made a mistake rejecting Algonquin Power and Utilities Corp.’s (TSX:AQN, OTC:AQUNF) 2011 offer of C$2.50 a share, so it’s clear that Savitr is willing to accept less for the company than management.

Other shareholders  will want to sell the company for as much as possible.  They should vote for the team they think is best able to interest the broadest range of possible buyers in the company, and best able to advance its Yabucoa solar project and increase the company’s value in the meantime.   I personally think current management has the best team for these two jobs, and will be voting my yellow proxy in favor of management’s nominees on September 25th.

While Brookfield’s stock purchase has been good news for Western Wind shareholders in the short term, if Brookfield casts the decisive vote in the proxy battle, it may well mean that we will end up with less for our shares that we would have gotten otherwise.

Brookfield must think so, or they would not have bothered striking the deal with Goodman.

Disclosure: Long WND, BRP-UN, AQN.

This article was first published on the author's Forbes.com blog, Green Stocks.

DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results.  This article contains the current opinions of the author and such opinions are subject to change without notice.  This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.  Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

Lead image: Vote against via Shutterstock

Untitled Document

RELATED ARTICLES

Why the Future of the Yieldco Is at Risk

Haresh Patel In the past two years, the proliferation of YieldCos, and their ability to open new sources of capital for renewable energy projects, has captured the attention of the energy industry. While a YieldCo’s potential to catalyz...

Floridians Seek To Let the Sunshine In Via Solar Power PPAs

Mike Antheil Florida, the Sunshine State, is infamously unfriendly to the solar market. Despite the abundance of prime sunshine, which ranks the state third in the nation for solar potential, less that 1/10th of 1 percent of Florida’s e...

How Solar Will Survive Tax Rate Hikes and the Credit Drop

Michael McGuire With the Fed set to raise interest rates soon and the looming expiration of the current solar investment tax credit (ITC), many are questioning what will happen next in solar, but these seemingly negative changes to the ind...
wind turbines

Powering Texas: Big, Clean, Market-Driven Changes are Already Underfoot

Peter Sopher, EDF Over the past century, the electric grid in the United States has experienced only minor changes. There is evidence, however, the power sector is changing. We are moving away from traditional coal generation and toward alte...
Tom Konrad is a private money manager and freelance writer focused on Peak Oil and Climate Change as investment themes. He manages portfolios for individual clients and is Head of Research for the JPS Green Economy Fund (http://jpsgreeneconomyfund...

CURRENT MAGAZINE ISSUE

Volume 18, Issue 4
1507REW_C11

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @megcichon @jennrunyon

FEATURED PARTNERS



EVENTS

There is no current content available.

COMPANY BLOGS

There is no current content available.

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS