DEDHAM, Mass., March 25, 2020 /CNW/ -- Atlantic Power
Corporation (NYSE: AT) (TSX: ATP) ("Atlantic Power" or the
"Company") announced today that it has commenced a substantial
issuer bid (the "Offer") to purchase from the holders of the common
shares of the Company (together with the purchase rights associated
with such common shares, the "Common Shares") up to US$25 million of the Common Shares. The Offer is
for up to 12,820,512 Common Shares, or approximately 12% of the
Company's total issued and outstanding Common Shares, if the
purchase price is determined to be US$1.95 (which is the minimum price per Common
Share under the Offer).
Background and Rationale for the Offer
Since 2015, the Company has utilized a series of normal course
issuer bids to repurchase its securities, when doing so has been
accretive to management's estimates of intrinsic value per share.
During that period, the Company has strengthened its financial
position, reducing debt, interest payments and overhead costs. With
operating cash flow well supported by power purchase agreements
that have an average remaining life of six years and significant
cash on its balance sheet, the Company has used discretionary cash
to fund acquisitions and repurchase its securities.
The Company believes that the recent trading level of its Common
Shares reflects a price that is below management's estimates of
intrinsic value per Common Share and thus has determined that an
acceleration and expansion of Common Share repurchases is in the
best interests of the Company. The board of directors (the
"Board"), therefore, has approved the Offer. The Offer provides
liquidity to those shareholders that sell under the Offer while
increasing the relative ownership of remaining shareholders. The
Board, together with management, will continue to review various
options for the allocation of capital including, but not limited
to, repurchases of the Company's securities (in accordance with
applicable laws).
Details of the Offer
The Offer will proceed by way of a "modified Dutch auction".
Holders of Common Shares ("Shareholders") wishing to tender to the
Offer are entitled to do so pursuant to: (i) auction tenders in
which they specify the number of Common Shares being tendered at a
price of not less than US$1.95 and
not more than US$2.20 per Common
Share in increments of US$0.05 per Common Share, or (ii) purchase
price tenders in which they do not specify a price per Common
Share, but rather agree to have a specified number of Common Shares
purchased at the purchase price to be determined by auction
tenders.
The purchase price to be paid by the Company for each validly
deposited Common Share will be based on the number of Common Shares
validly deposited pursuant to auction tenders and purchase price
tenders, and the prices specified by Shareholders making auction
tenders. The purchase price will be the lowest price which enables
the Company to purchase Common Shares up to the maximum amount
available for auction tenders and purchase price tenders,
determined in accordance with the terms of the Offer. Common Shares
deposited at or below the final determined purchase price will be
purchased at such purchase price. Common Shares that are not taken
up in connection with the Offer, including Common Shares deposited
pursuant to auction tenders at prices above the purchase price,
will be returned to the Shareholders.
If the aggregate purchase price for Common Shares validly
tendered pursuant to auction tenders and purchase price tenders is
greater than the amount available for auction tenders and purchase
price tenders, Atlantic Power will purchase Common Shares from
Shareholders who made purchase price tenders or tendered at or
below the finally determined purchase price on a pro rata basis,
except that "odd lot" holders (holders of less than 100 Common
Shares) will not be subject to proration.
The Common Shares are listed and posted for trading on the
Toronto Stock Exchange (the "TSX") under the symbol "ATP" and on
the New York Stock Exchange (the "NYSE") under the symbol "AT". On
March 24, 2020, the last full trading day prior to the
announcement by the Company of the commencement of the Offer, the
closing price per Common Share on the TSX and NYSE was Cdn$2.83 and US$2.00, respectively. As
of March 24, 2020, there were
105,502,338 Common Shares issued and outstanding.
The Company will fund any purchases of Common Shares pursuant to
the Offer from available cash on hand. All Common Shares purchased
by the Company under the Offer will be cancelled.
The Offer is not conditional upon any minimum number of Common
Shares being deposited, but is subject to various other conditions
as detailed in the formal offer to purchase, issuer bid circular
and the related letter of transmittal and notice of guaranteed
delivery, containing the terms and conditions of the Offer and
instructions for depositing the Common Shares (the "Offer
Documents"). The Offer Documents are being mailed to registered
Shareholders and filed with the applicable securities regulators
and available on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov.
The Offer will expire at 5:00 pm
(Toronto time) on April 30, 2020 (the "Expiration Date"), unless
extended, varied or withdrawn by the Company.
In accordance with applicable Canadian and U.S. securities laws,
the Company has suspended purchases of its Common Shares and
convertible debentures pursuant to its current normal course issuer
bid ("NCIB") commenced on December 31,
2019 until after the Expiration Date or date of termination
of the Offer. During the twelve months preceding the date of the
Offer, the Company has purchased for cancellation an aggregate of
4,780,026 Common Shares under its NCIBs.
RBC Dominion Securities Inc. ("RBC") is acting as dealer manager
and financial advisor to the Company in connection with the
Offer.
None of Atlantic Power, its directors, RBC, or
Computershare Trust Company of Canada, the depositary for the Offer, or any
of their respective affiliates, makes any recommendation to any
Shareholders as to whether to deposit or refrain from depositing
all or any portion of their Common Shares under the Offer.
Shareholders must make their own decisions as to whether to deposit
or refrain from depositing their Common Shares, and, if so, the
amount of their Common Shares to deposit. Shareholders are
strongly urged to review and evaluate carefully all information in
the Offer Documents, to consult their own financial, tax and legal
advisors, and to make their own decisions as to whether to deposit
Common Shares in the Offer. Shareholders should carefully consider
the income tax consequences of accepting the Offer and depositing
Common Shares in the Offer.
About Atlantic Power
Atlantic Power is an independent power producer that owns power
generation assets in eleven states in the
United States and two provinces in Canada. The Company's generation projects sell
electricity and steam to investment-grade utilities and other
creditworthy large customers predominantly under long-term power
purchase agreements that have expiration dates ranging from 2020 to
2043. The Company seeks to minimize its exposure to commodity
prices through provisions in the contracts, fuel supply agreements
and hedging arrangements. The projects are diversified by
geography, fuel type, technology, dispatch profile and offtaker
(customer). Approximately 75% of the projects in operation are 100%
owned and directly operated and maintained by the Company. The
Company has expertise in operating most fuel types, including gas,
hydro, and biomass, and it owns a 40% interest in one coal
project.
Atlantic Power's shares trade on the New York Stock Exchange
under the symbol AT and on the Toronto Stock Exchange under the
symbol ATP. For more information, please visit the Company's
website at www.atlanticpower.com or contact:
Atlantic Power Corporation
Investor Relations
(617) 977-2700
info@atlanticpower.com
Copies of financial data and other publicly filed documents are
filed on SEDAR at www.sedar.com or on EDGAR at
www.sec.gov/edgar.shtml under "Atlantic Power Corporation" or on
the Company's website.
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Cautionary Note Regarding Forward-Looking Statements
Certain statements in this news release may constitute
forward-looking information or forward-looking statements within
the meaning of applicable securities laws (collectively,
"forward-looking statements"), which reflect the expectations of
management regarding the future growth, results of operations,
performance and business prospects and opportunities of the Company
and its projects. These statements, which are based on certain
assumptions and describe the Company's future plans, strategies and
expectations, can generally be identified by the use of the words
"plans", "expects", "does not expect", "is expected", "budget",
"estimates", "forecasts", "intends", "anticipates" or "does not
anticipate", "believes", "outlook", "objective", or "continue", or
equivalents or variations, including negative variations, of such
words and phrases, or state that certain actions, events or
results, "may", "could", "would", "should", "might" or "will" be
taken, occur or be achieved. Examples of such statements in this
press release include, but are not limited, to statements with
respect to the following:
- the expiration of the Offer;
- the terms and conditions of the Offer;
- the aggregate amount of Common Shares to be purchased for
cancellation under the Offer; and
-
the Company's objectives, plans, goals, strategies, future growth, results of operations, financial and
operating performance and business prospects and opportunities.
Forward-looking statements involve significant risks and
uncertainties, should not be read as guarantees of future
performance or results, and will not necessarily be accurate
indications of whether or not or the times at or by which such
performance or results will be achieved. Please refer to the
factors discussed under "Risk Factors" and "Forward-Looking
Information" in the Company's periodic reports as filed with the
Securities and Exchange Commission from time to time for a detailed
discussion of the risks and uncertainties affecting the Company.
These risks and uncertainties include, but are not limited to,
potential risks and uncertainties relating to the ultimate
geographic spread of the novel coronavirus (COVID-19), the severity
of the disease, the duration of the COVID-19 outbreak, actions that
may be taken by governmental authorities to contain the COVID-19
outbreak or to treat its impact, the potential negative impacts of
COVID-19 on the global economy and financial markets and any
resulting impact on the satisfaction of the conditions of the Offer
such that the Company may not be required to purchase the Common
Shares and/or may terminate the Offer. Although the forward-looking
statements contained in this news release are based upon what are
believed to be reasonable assumptions, investors cannot be assured
that actual results will be consistent with these forward-looking
statements, and the differences may be material. These
forward-looking statements are made as of the date of this news
release and, except as expressly required by applicable law, the
Company assumes no obligation to update or revise them to reflect
new events or circumstances.
For the avoidance of doubt, the above-mentioned Uniform Resource
Locators ("URLs") given in respect of web-site addresses are
inactive textual references only and it is not intended to
incorporate the contents of any such web sites into this news
release nor should the contents of such web sites be deemed to
be incorporated into this news release.
Important Additional Information and Where to Find It
This communication does not constitute an offer to buy or the
solicitation of an offer to sell any securities. In connection with
the proposed transaction, Atlantic Power is filing with the SEC a
Tender Offer Statement under Section 13(e)(4) of the Securities
Exchange Act of 1934, as amended (the "Tender Offer Statement").
This communication is not intended to be, and is not, a substitute
for such filings or any other document that Atlantic Power may file
with the SEC in connection with the Offer. Investors and security
holders are urged to read the Tender Offer Statement and its
exhibits regarding the proposed transaction, because it contains
important information that you should consider before making any
decision regarding the Offer. You may obtain a free copy of the
Tender Offer Statement and its exhibits and other related documents
filed by Atlantic Power with the SEC at the SEC's website at
www.sec.gov or from Atlantic Power's website at
www.atlanticpower.com.
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SOURCE Atlantic Power Corporation