OTCPK:MGMXD - Post by User
Post by
R_J_on Nov 07, 2017 7:12am
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Post# 26916450
Not everybody is 'Tendering'.
Not everybody is 'Tendering'.Adrian Day’s Global Analyst
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Quote:
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Goodbye to Alterra after it Agrees to Be Acquired
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Alterra Power (AXY, To., 7.83) has agreed to be acquired by Innergex, a Canadian
renewable energy company. Investors will receive C$2.06 cash and 0.4172 of an
Innergex share. As always occurs, the acquirer’s stock price fell on the news (from $15
to $14.11); at today’s price, the acquisition equates to C$7.95.
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We are often saddened to see a long-term holding go, even at a nice premium, and
especially so in this case, where after a long difficult period, the company had turned and
was generating operational profits, cut its debt, and instituted a dividend with a view to
becoming a cash-flowing, high-yielding vehicle.
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Founder and Chairman Ross Beaty, in fact, noted that the company “was just hitting our stride” when the offer from Innergex was made.
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We had recommended it as a buy in our last newsletter at C$5.33.
We do not intend to hold Innergex on our list for the long term.
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What we know about the company appears positive enough;
it has a good balance sheet,
a diversified portfolio,
it pays a dividend equating to a 4.7% yield (and will continue its payout policy);
and combining the companies will reduce the cost of capital for Alterra’s projects,
a significant drawback to a standalone Alterra.
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Certainly some of you may wish to hold this company,
but we will not be following it in this newsletter.
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End Quote.
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RJ