Pattern Energy Board of Directors Reiterates Recommendation that Stockholders Vote “FOR” Proposed Canada Pension Plan Investment Board Transaction

by ahnationtalk on February 19, 202054 Views

SAN FRANCISCO, Feb. 19, 2020 — Pattern Energy Group Inc. (Nasdaq and TSX: PEGI) (“Pattern Energy” or the “Company”) today announced that the Company’s Board of Directors (the “Board”) reiterated its recommendation that stockholders vote “FOR” the proposals relating to the Company’s pending transaction with Canada Pension Plan Investment Board (“CPP Investments”) at the upcoming Special Meeting.

The Company issued the following statement:

The Pattern Energy Board firmly believes that proceeding with the transaction, which provides stockholders with significant, immediate and certain value, is advisable and is in the best interest of the Company and its stockholders.

Assertions on Pattern Energy’s potential standalone price absent the CPP Investments transaction are speculative and down-play a number of key factors, including:

  • The CPP Investments transaction monetizes Pattern Energy’s growth prospects, including realizing the value of Pattern Development 2.0, at an attractive value.
  • If it were to proceed standalone, the Company would need to raise substantial equity in the public market to execute on its growth plan. The Company has historically traded at a material discount to peers, which has made raising accretive equity challenging.
  • In light of historic volatility in the sector, a short-term spike in prices should not be viewed as a reliable basis for predicting long-term value.

The Board also believes unique events at certain other renewable energy companies have elevated their stock prices. For example, in January, Brookfield Renewable announced it was acquiring the remaining stake in TerraForm Power it did not already own, and Clearway Energy’s stock moved based on rumors of a settlement with PG&E debt holders. In February, Innergex Renewable Energy Inc. announced a strategic partnership with Hydro-Québec.

The CPP Investments transaction is the result of a robust process led by a Special Committee of the Pattern Energy Board, which considered multiple alternatives to the Company’s standalone plan. As part of the process, the Special Committee of the Board retained independent legal and financial advisors, engaged in contact with or received indications of interest from 10 separate parties and received a fairness opinion with respect to the CPP Investments transaction. The financial advisors on behalf of the Special Committee of the Board also contacted 16 additional potential bidders as part of the “go-shop” period under the merger agreement. Each party that was contacted either did not respond or notified Pattern Energy that, after further review, it would not be interested in pursuing a potential transaction with Pattern Energy.

The Board therefore continues to recommend that stockholders vote “FOR” the proposals relating to the CPP Investments transaction at the Special Meeting.

Pattern Energy continues to expect the transaction to close by the second quarter of 2020, subject to Pattern Energy stockholder approval, receipt of the required regulatory approvals, and other customary closing conditions.

Evercore and Goldman Sachs & Co. LLC are acting as independent financial advisors to Pattern Energy’s Special Committee of the Board, and Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as independent legal counsel to the Special Committee of the Board.

About Pattern Energy

Pattern Energy Group Inc. (Pattern Energy) is an independent power company listed on the Nasdaq Global Select Market and Toronto Stock Exchange. Pattern Energy has a portfolio of 28 renewable energy projects with an operating capacity of 4.4 GW in the United States, Canada and Japan that use proven, best-in-class technology. For more information, visit www.patternenergy.com.

 

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