Shareholders of Ascendant Group Ltd have approved a takeover attempt by a Canadian utilities group.
They gave overwhelming backing to the bid from Algonquin Power and Utilities Corporation, in a meeting held at the Hamilton Princess & Beach Club yesterday.
Peter Durhager, the chairman of Ascendant’s board of directors, told shareholders in attendance that, of those who voted, 99 per cent had supported the transaction.
Ian Robinson, the chief executive of Algonquin, said the company was “very pleased” by the strong support for the acquisition.
He added: “We look forward to developing deep relationships with employees, customers, and the Bermuda community and look forward to being a part of the exciting future for Bermuda Electric Light Company Ltd and Ascendant’s non-regulated businesses.”
Algonquin offered $365 million for the shares in Ascendant, which includes electricity supplier Belco Ltd, AirCare Ltd, iEPC Ltd, IFM Ltd and Ascendant Properties Ltd.
Shareholders will receive $36 per share, a premium of 20 per cent over Thursday’s closing share price of $30 per share.
Ascendant’s board of directors previously voted unanimously in favour of accepting the bid.
Mr Durhager told shareholders that Algonquin “have the capital resources, the operational knowledge and the experience in renewable innovation necessary to advance the company’s efforts to provide cleaner and more cost-effective electricity to our community”.
The company operates 54 energy facilities, about 90 per cent of which are renewable.
It operates in 13 states in the United States and one province in Canada with 2,300 employees.
Mr Durhager said that there would be expectations on Algonquin to reinvest profits in Bermuda.
He added: “A smart owner will both invest in the infrastructure that they own, and also in the community in which they are operating.”
But he added: “At the end of the day, it is their prerogative what they do with their profits.”
He said that the issue of the 60/40 rule would be examined after the takeover was backed.
Mr Durhager added: “The government regulators, in this case the Ministry of Finance, the Bermuda Monetary Authority and the Regulatory Authority, will have to get involved.
“Certainly the BMA and the Ministry of Finance will be making a determination to issue a licence to any non-Bermudian owner that would own more than the relevant portion.
“So there’s no difference in this transaction than any other business in Bermuda.”
He said that the deal was about more than the cash offered.
Mr Durhager explained: “It’s the technology transferred, the development and training, it’s the exposure of our people — it’s all of those things that make this exciting for Bermuda.
“I don’t look upon this as the end, I look upon this as a new beginning.”
The bid by Algonquin will require regulatory approval before going ahead.
A spokeswoman for the Regulatory Authority of Bermuda said that Belco would need to apply for a change of control as a licensee.
She added: “Once that is done the RA will do our due diligence and get back to them.”
Walter Roban, the Minister of Home Affairs, did not responded to a request for comment by press time yesterday.
The June 3 announcement of the intended sale of Ascendant to Algonquin marked the conclusion of a four-month evaluation of “strategic alternatives” by Ascendant.
The company said the process was robust, and attracted interest from a number of other reputable international firms.
Algonquin is a diversified generation, transmission and distribution utility with approximately $10 billion of total assets and a market capitalisation of $5.5 billion.
Through its two business groups it provides rate-regulated natural gas, water, and electricity generation, transmission, and distribution utility services to approximately 800,000 connections in North America.
Common shares of Algonquin, which is based in Oakville, Ontario, are listed on the Toronto Stock Exchange and the New York Stock Exchange under “AQN”.