Canadian Hydro Developers rejects TransAlta bid

Canadian Hydro Developers Inc. on Thursday rejected an unsolicited takeover bid from TransAlta Corp.

CEO Kent Brown dismissed the $4.55-a-share offer TransAlta made Monday, calling it "inadequate" and the timing "purely opportunistic."

The Canadian Hydro board, which unanimously recommended shareholders hold on to their stock rather than accept the TransAlta offer, concluded that the $654-million bid undervalues:

• The company's team, "the most successful and experienced in the Canadian renewable energy industry."
• The scarcity value of Canadian Hydro as a 100 per cent renewable power producer.
• Canadian Hydro's inventory of development projects.
• Renewable energy credits and carbon credits.
• Canadian Hydro's tax losses.
• Canadian Hydro's contracts with buyers who have signed  long-term power purchase agreements.

The TransAlta offer is opportunistic because Canadian Hydro is growing quickly, will soon be able to finance some developments internally and its stock price is not tracking its intrinsic worth, the company said.

Canadian Hydro shares have traded above the TransAlta bid since it was made, suggesting the market expects a higher offer.

TSX trading volumes have been very heavy since the offer was announced. The stock closed up two cents at $5.10 Thursday.