Canadian Hydro says it has better suitors

Canadian Hydro Developers Inc. said Tuesday it has multiple bids to rival that from power producer TransAlta Corp.

The renewable energy producer said in a release it has received a flood of proposals since opening its detailed financial statements to other potential bidders. 

TransAlta announced its bid of $4.55 per share in late July. Canadian Hydro said then that was too low. The TransAlta bid values it at $654 million, but Canadian Hydro put its worth at $1.7 billion.

Board chairman Dennis Erker said in Canadian Hydro's latest release that TransAlta "no longer has the leading proposal." The company did not say whether there was a higher bid and or name any other potential bidders.

TransAlta has said Canadian Hydro would weather the economic downturn better as a division of a bigger company with access to cheaper capital.

Takeover battles often feature gamesmanship as the target company tries to get the best offer. Shareholders can sue corporate directors if they believe the board sold for too little. TransAlta on Monday extended its offer to Oct. 2.

"We will pursue the course of action that is in the best interests of Canadian Hydro and its shareholders."

Canadian Hydro operates 21 hydro and wind projects in B.C., Alberta, Ontario, and Quebec.

TransAlta operates 50 power plants in Canada, the U.S., and Australia, many of them coal-fired, which the company has conceded in the past could require it to find ways to offset penalties under climate change legislation. Both companies are based in Calgary.

Canadian Hydro shares opened at $5.13 Tuesday, up 13 cents from Monday's close.