I recently tendered my shares of Western Wind Energy (TSX-V:WND, OTC:WNDEF) to Brookfield Renewable Energy Partners' (TSX:BEP.UN, OTC: BRPFF) with an extended offer for Western Wind at C$2.60 a share. This is despite the fact that I think (and was even quoted in a Western Wind press release) Western Wind is worth more than C$2.60.

Two things have changed.  After conversations with other investors, Western Wind CEO Jeff Ciachurski, and a representative of Brookfield, as well as reading some evidence of extremely bad governance in Western Wind's Q3 2012 filing, I no longer think that Western Wind's management or board are committed to the sale process.  If there is another bidder willing to offer more than C$2.60 a share, I don't have confidence that the directors will present it to shareholders.  On September 20, Western Wind issued a press release, signed by all five directors, where they committed to the sale process.  They said, "The highest bid will not be denied and regardless of market conditions, the highest bid will be forwarded to the shareholders, for their approval."

C$2.60 is the highest bid, yet the directors are recommending we reject it.  It does not build confidence.

I went into a lot more details as to why I don't think we'll see a higher bid and why we should tender our shares in an article on Forbes yesterday.  Here are the basic points:

  1. While there may be potential bidders willing to pay over C$2.60 per share, none are willing to pay C$3 or more.
  2. Ciachurski and the board have already paid themselves the change of control bonus for selling the company, and no longer have that incentive to sell.
  3. Bringing the Yabucoa project to financial close will not add significant value for potential bidders.
  4. If the Brookfield’s offer expires unsuccessfully, WND will decline significantly in the short term.
  5. Ciachurski has a habit of alienating possible buyers.  This reduces the potential pool of bidders, and lowers the price that shareholders can expect for their stock.
  6. Brookfield is very close to succeeding; the readers of this article are likely to make the difference.

The title of this article comes from my conclusion:

It’s not as if I or most of my readers are selling at a loss.  Since I started writing about the company shortly before the Algonquin bid in 2011, Western Wind has traded mostly in the $1 to $2 range, so we’re all looking at gains between 25% and 100%.  It’s time to declare victory and go home.

You can read the details here.

You'll note that point 5 above was that Ciachurski has a habit of alienating possible buyers.  It's not just buyers he goes after... it's anyone who gets in his way.  Here's an email he sent me this morning, in response to the Forbes piece.

Hi Tom,

I read your news blast today.  I have no problem with your desire to do what you want with your stock I do find the reasoning to border on stupidity.
Do to your conclusions, I am certain your lack of knowledge is the reason you have a very few followers.  I should of done my DD on you first, but now I know why you have no followers.

I do not have the time to respond to anywhere near you babbling comments, but a few come to mind.

1)  AQN [Algonquin Power and Utilities (TSX:AQN, OTC:AQUNF)] and BEP are the largest pure play renewable energy players in NA.  reality check - AQN has a huge portfolio of fossil fuel generating assets, clearly making you a moron when it comes to research and knowledge.

2) I can take my money and invest in FVR.[Finavera Wind Energy (TSXV:FVR, OTC:FNVRF)] reality check - FVR has no production, has been rolled back 10 for 1 and is down 1000% in three years.  FVR has no production or decent revenues.  Looks like you need the public to bail out your position.

3) I am getting paid bonuses not to sell the company - Tom, I could sue you until you are in the poor house for this serious defamation and lies. You printed this now it is easy to sue you.

4) By having low dilution and therefore low equity into our projects our project loans are higher. -  You have exceeded the moron threshold by a factor of 500%.  Our project loans are the lowest in the industry. In fact triple AAA banks that we use could NEVER charge more interest. This would imply more risk which no A rated bank will take on.

5) I do not care what Brookfield did in Brazil, I just want their Canadian dollars - really - yet you published a defaming article about myself last year and now you lie about the WSJ article.  It said many people were indicted and Brookfield hire an armoured truck to carry the pay off bribes.

Anyhow, the 39% like you who have tendered have weakened the case for the 61% who want more dough.

I hope you are aware that I can use unlimited funds to sue you for your defamation. In addition to defamation you have displayed total stupidity in your investment recommendation to sell WND to buy FVR.

Tom, I look forward to seeing you in court and sanctioned by the regulators.

I'm not particularly concerned about the threats, since everything I said is backed up by published documentation.  I do have to wonder where the "unlimited funds" with which he is threatening to sue me for defamation are going to come from. 

According to several people I've talked to about Ciachurski over the two and a half years I've been covering Western Wind, such threatening letters (as well as text messages and midnight phone calls) are his standard MO when anyone crosses him.  (Here's a quick note to you, Jeff: If you want to annoy me, you'll have more luck with the midnight phone calls.  With phone calls, it will be annoying to transcribe them for publication.  With email, I can just cut and paste.)

Needless to say, I won't be investing in another Jeff Ciachurski-run company any time soon.

Disclosure: Long WNDEF, BRPFF, FNVRF, AQUNF.

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.

This article was originally published on AltEnergy Stocks and was republished with permission.

Lead image: Wind turbine via Shutterstock