Seeking Relief from Oppression
NEW YORK, April 23, 2019 /CNW/ - Mangrove Partners
("Mangrove"), one of the largest shareholders of TransAlta
Corporation ("TransAlta" or the "Company") (TSX:TA)
(NYSE:TAC) with aggregate ownership of 7.1% of the Company's
outstanding shares, today announced that it has commenced an action
in the Ontario Superior Court of Justice against TransAlta, its
Directors and Brookfield BRP Holdings (Canada) ("Brookfield" and together, the "Named
Parties").
The action arises out of TransAlta's continued misrepresentation
and obfuscation of critical details relating to the upcoming 2019
annual and special meeting of shareholders, and the proposed
$750 million transaction (the
"Brookfield Transaction" or the "Transaction")
between the Company and Brookfield BRP Holdings (Canada) Inc.
In the action, Mangrove seeks relief under the oppression remedy
provisions of the Canada Business Corporations Act, asking the
Court to set aside the Brookfield Transaction. Mangrove commenced
the action following TransAlta's repeated insistence, to both the
Ontario Securities Commission and the Alberta Securities
Commission, that Mangrove pursue its claims for relief in the
courts and not before the Commissions.
In its statement of claim, Mangrove outlines the rushed,
defensive and improvident nature of the Brookfield Transaction,
including that the TransAlta Special Committee was formed less than
two weeks before the public announcement of the Transaction, and
that CIBC was not formally engaged as financial advisor until three
days before the announcement. The claim also records that
TransAlta had rebuffed multiple offers by Brookfield to acquire the entire Company over
the past several years, only acceding to Brookfield's repeated entreaties when faced
with an imminent proxy contest.
Nathaniel August, President and
Portfolio Manager at Mangrove Partners, said, "The TransAlta Board
has made every effort to obscure the true process by which the
Brookfield transaction came to
pass and their motives for entrenching themselves at the expense of
shareholders. As a large and engaged shareholder of
TransAlta, we cannot allow this conduct by the Board and its
Special Committee to go unchallenged. So, at TransAlta's own
recommendation, we have brought an oppression action and will seek
to hold TransAlta accountable to its shareholders."
Added August, "Under the leadership of Chairman Gordon Giffin, TransAlta has generated
disastrous total shareholder returns of -40%, compared to +47% for
the TSX.1 Along with the other members of the
Special Committee, his decision to recommend the Brookfield
Transaction reflects yet another failure to uphold his fiduciary
duties and act in the best interests of shareholders.
Consequently, we intend to withhold on all three Special Committee
directors up for election, as we also seek relief in the Ontario
Courts to set aside an improvident and self-interested transaction,
and protect the rights of all shareholders."
Notes
1 Total shareholder returns for TransAlta and the
S&P/TSX Composite Index between 4/28/2011, when Gordon Giffin appointed Chairman, until Mangrove
filed its 13-D on 3/15/2019.
About Mangrove Partners
Mangrove Partners is a value-oriented investment manager founded
in 2010. Mangrove's investment objective is to organically compound
net worth while minimizing the chances of a permanent loss of
capital.
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SOURCE Mangrove Partners