AXY Is Now A Part of the INE FamilyLONGUEUIL, QC , Dec. 14, 2017 /CNW Telbec/ - Innergex Renewable Energy Inc. (INE.TO) ("Innergex") welcomes the decision by shareholders of Alterra Power Corp. (AXY.TO) ("Alterra") to approve the arrangement agreement ("Arrangement Agreement") pursuant to which Innergex will acquire all of the issued and outstanding common shares of Alterra. Alterra shareholders were asked to vote on a special resolution approving the Arrangement Agreement in accordance with its terms during a Special Meeting of Shareholders held in Vancouver earlier today. The special resolution was approved by 99.89% of the 32,994,488 votes cast by Alterra shareholders. Completion of the transaction remains subject to court and certain regulatory approvals in Canada and U.S., key third party consents and other customary closing conditions. The transaction is not subject to approval by Innergex shareholders. Closing of the transaction is expected to occur in the first quarter of 2018. https://finance.yahoo.com/news/innergex-obtains-support-alterras-shareholders-004000861.html
I have been thinking about the reasons for the merger. I am still for it, but I don't always believe what is in the paper. Will AXY and INE be stronger together? YES!
However, was the cost of capital reason, really the reason for AXY to go through with it? This is starting to sound more like a cover story than hard truth. Lynda Freeman is a smart CFO and Mr. Beaty has the financial prowess. AXY has several rising stars too, including Jay Sutton. INE will more than benefit from the combination. So should the shareholders.
Does AXY have cost of capital issues? Probably. But with the balance sheet improvement (see 3Q2017 results) and increasing cash flow and projects coming on line. Merge this into the benefits of INE, perhaps you form some magic here.
Enjoy your holiday season and Merry Christmas,
Bold Forbes