Investment groups make $7.82B offer for TransAlta

Two investment groups said Monday that they are making a $7.8 billion bid to take Canada's largest generator of wind power private.

Power company LS Power Equity Partners and Global Infrastructure Partners say they have offered $38.84 a share U.S. for Calgary-based TransAlta Corp., a 21 percent premium over Friday's closing stock price of $32.13. TransAlta shares jumped more than 15 percent, or $4.93, to end at $37.06 in the U.S. after surging to an all-time high of $37.84 earlier in the session.

TransAlta is a nearly 100-year-old wholesale power generator whose customers include utilities and corporations in Canada, the U.S. and Australia. It had revenue of $2.77 billion Canadian last year and profits of $308.9 million.

It has 50 power plants that can generate 9,000 megawatts of power, enough to run 7.3 million homes.

Besides wind power, it has plants powered by coal, natural gas, hydro and geothermal.

The company said it will study the proposal.

LS Power and its affiliates already own 9 percent of TransAlta's stock. LS Power and Global Infrastructure say TransAlta is not fairly valued.

"While we are enthusiastic about TransAlta, we continue to believe that the (company) is undervalued and will not be fairly valued as a public company," the investment groups said in their proposal.

LS Power President Jim Bartlett said LS Power and TransAlta complement each other since both have a broad portfolio of generating assets.

"This company has a very good long-term strategy in place," Bartlett said. "We don't intend to change that."

The companies said the transaction would be funded by $6 billion in equity and $2 billion in debt.

LS Power has operations across the U.S. that can generate 7,000 megawatts of power from coal, gas and renewable energy.

Global Infrastructure has a stake in the London City Airport along with other investments in energy, water, transport and waste management operations. Its operational headquarters are in Stamford, Conn. Credit Suisse and General Electric are the founding investors.

___

On the Net:

http://www.lspower.com/

http://www.global-infra.com/

http://www.transalta.com