Western Wind mails supplementary directors' circular and makes no
recommendation to shareholders as to whether to accept or reject
the Brookfield offer
TSX.V Symbol: "WND"
OTCQX Symbol: "WNDEF"
Issued and Outstanding: 70,462,806
VANCOUVER,
Jan. 21, 2013 /CNW/ - Western Wind
Energy Corp. - (the "Company" or "Western Wind") (TSX Venture
Exchange - "WND") (OTCQX - "WNDEF") announces that it has mailed a
supplementary directors' circular (the "Supplementary Directors'
Circular") in response to the offer (the "Offer") from WWE Equity
Holdings Inc. (the "Offeror"), an indirect subsidiary of Brookfield
Renewable Energy Partners L.P. ("Brookfield Renewable") to Western
Wind shareholders to purchase all of the issued and outstanding
shares of Western Wind (the "Shares") for $2.50 in cash per Share, upon the terms and
subject to the conditions set forth in the circular of the Offeror
dated November 26, 2012 (the "Offeror
Circular").
The Supplementary Directors' Circular contains
NO RECOMMENDATION of the Western Wind board of directors (the
"Board of Directors") as to whether shareholders of Western Wind
(the "Shareholders") should accept or reject the Offer.
Shareholders should consider the information contained in the
Supplementary Directors' Circular carefully and make their own
decisions. Shareholders who are in doubt about how to respond to
the Offer, should consult their investment dealer, stockbroker,
lawyer or other professional advisors.
Reasons for Making No Recommendation
After careful consideration of the risks and
opportunities presented by the Offer, the members of the special
committee of the Board of Directors (the "Special Committee") found
themselves unable to make a recommendation to Shareholders to
accept or reject the Offer. Ultimately, they concluded, it is a
choice that will rest on each Shareholder's personal circumstances,
appetite for risk and tolerance of uncertainty.
On July 30, 2012,
the Company announced that it would be seeking a buyer for the
Company and its assets, and that the Board of Directors had
established the Special Committee. On August
10, 2012, the Company announced that it had engaged
Rothschild (Canada) Inc.
("Rothschild") as its lead financial advisor to manage and
structure a comprehensive and efficient auction process, with PI
Financial Corp. engaged as a co-advisor.
On July 31, 2012,
Savitr Capital, LLC announced that it intended to nominate five new
directors for election to the Board of Directors. All five of
management's nominees were ultimately elected to the Board of
Directors at the Company's annual general meeting held on
September 25, 2012. However, the
Company believes that there was at least an eight week delay in the
proper functioning of the auction process due to the distraction
caused by the proxy contest.
After the Company's annual general meeting held
on September 25, 2012, the Board of
Directors again focused on the auction process. The auction process
has since been progressing as planned and as part of that process,
the Board of Directors continues to be in discussions with
potential buyers. However, no binding offer has been made as of the
date of the Supplementary Directors' Circular. Several of the
parties contacted by Rothschild have executed confidentiality
agreements and conducted due diligence. Initial expressions of
interest were received by the Company, some of which implied a
value for the Company significantly greater than that offered by
the Offeror. Seven parties remain in the process and continue to
have access to the data room. Some of these parties have an
interest in an individual asset, while others are considering an
acquisition of the Company as a whole. Further, the Company is
continuing to negotiate non-disclosure agreements with a small
number of qualified parties to gain access to the data room. If
they enter into the auction process, these parties will likely not
be in a position to provide their views on value for several
weeks.
Accordingly, while a financially superior offer
may be made before the expiry of the Offer, the Offer is the only
offer to purchase all of the outstanding Shares that is open for
acceptance by Shareholders at the date of the Supplementary
Directors' Circular. Shareholders who are attracted by the
certainty of an opportunity to sell their Shares for cash at this
time may prefer to accept the Offer. The Board of Directors does
note that the Company's assets are infrastructure assets generating
power under long term power purchase agreements. Accordingly, the
value of these assets is not expected to be diminished by the
success or failure of the Offer.
On the other hand, Western Wind is an
independent renewable energy production company that owns and
operates wind and solar generation facilities with 165 net
megawatts of rated capacity operating in the states of California and Arizona. Western Wind also owns
substantial development assets for both solar and wind energy in
the United States. See "Western Wind". On January 2, 2013, Western Wind announced progress
towards bringing the Yabucoa project in Puerto Rico to a financial close, which will
create value for Shareholders. In addition, as part of the recent
"fiscal cliff" package, the United States Congress approved an
extension to a certain federal tax credit for wind power. In the
latter months of 2012, the uncertain fate of the wind tax credit
resulted in depressed valuations of companies in the wind power
industry. Shareholders who sell their Shares now, either in the
market or by accepting the Offer, will forego any opportunity to
realize the value created by the Yabucoa project, which could be
significant, as well as Western Wind's other projects including any
benefit of the extended federal tax credits for wind power.
In the view of the Special Committee, the
decision of a Shareholder to accept or reject the Offer will be
based on the Shareholder's individual circumstances, appetite for
risk and hope of return. Accordingly, the Special Committee
concluded that the Board of Directors could not usefully make a
recommendation to Shareholders, but should instead strive to
provide Shareholders with all of the relevant information to allow
them to make that decision for themselves.
The Board of Directors adopted the conclusions
of the Special Committee and determined that it would not make a
recommendation to Shareholders whether to accept or reject the
Offer.
The following is a summary of the principal
reasons why the Special Committee and the Board of Directors have
decided to make NO RECOMMENDATION with respect to acceptance or
rejection of the Offer:
- Although a financially superior offer may be made before the
expiry of the Offer, the Offer is the only offer to purchase all of
the outstanding Shares that is open for acceptance by Shareholders
at the date of the Supplementary Directors' Circular.
- There are other significant risks and uncertainties related to
the Offer, which are described in further detail below. See "Risks
Related to the Offer".
Risks Related to the Offer
The Offer is subject to a number of risks and
uncertainties, including but not limited to the following:
- Western Wind has made submissions to staff of the Ontario
Securities Commission in respect of the Offeror's ability to rely
on an exemption from the requirement to obtain a formal valuation
in respect of the Offer. The Special Committee believes that a
formal valuation will benefit all Shareholders in that it will
allow them to assess the price offered by the Offeror relative to
the fair market value of the Shares as determined by an independent
valuator.
- The Offer is highly conditional to the benefit of the
Offeror. There are a number of conditions which are not
subject to a materiality threshold or other objective criteria but
provide the Offeror with a broad range of grounds upon which it may
decline to proceed with the Offer.
- The Offer is subject to the condition that there be validly
deposited under the Offer and not withdrawn at the expiry date of
the Offer, Shares representing more than 50% of the outstanding
Shares held by Independent Shareholders (as defined in the Offeror
Circular). However, the Offeror can waive this minimum tender
condition and take up all the Shares tendered, even if the minimum
tender condition is not met. If the Offeror acquires less than a
majority of the Shares, the Company's ability to effectively carry
on its business may be impaired by a poor working relationship with
Brookfield Renewable.
- The purchase of Shares by the Offeror pursuant to the Offer
will reduce the number of Shares that might otherwise trade
publicly and the number of Shareholders and could, therefore,
adversely affect the liquidity and market value of the remaining
Shares held by the public.
- Under the Offer, the Offeror may gain effective control of the
Company without any obligation to acquire the outstanding Shares
that were not tendered to its bid. This is inherently coercive
because a Shareholder may feel compelled to tender Shares to the
Offer, even if the Shareholder considers the offer price to be
inadequate, to avoid the risk that the Shareholder may be left
holding a minority investment at a reduced price reflective of a
minority discount and with significantly less liquidity.
- In the Offeror Circular, the Offeror has advised that if it
cannot complete a subsequent acquisition transaction, it will
evaluate its alternatives, which may include purchasing Shares in
the market, in privately negotiated transactions, in another
take-over bid for Western Wind, or otherwise, or taking no further
action to acquire additional Shares. Any additional purchases will
be at the discretion of the Offeror, and could be at a price
greater than, equal to or less than the Offer price.
The foregoing is only a summary of the
information and factors considered by the Special Committee and the
Board. This summary is not intended to be exhaustive. Shareholders
should read the entire Supplementary Directors' Circular, which
includes further details of the material information, factors and
analysis considered by the Special Committee and the Board.
ABOUT WESTERN WIND ENERGY CORP.
Western Wind is a vertically integrated
renewable energy production company that owns and operates wind and
solar generation facilities with 165 net MW of rated capacity in
production, in the States of California and Arizona. Western Wind further owns
substantial development assets for both solar and wind energy in
the U.S. The Company is headquartered in Vancouver, BC and has branch offices in
Scottsdale, Arizona and
Tehachapi, California.
Western Wind trades on the TSX Venture Exchange under the symbol
"WND", and in the United States on
the OTCQX under the symbol "WNDEF".
The Company owns and operates three wind energy
generation facilities in California, and one fully integrated combined
wind and solar energy generation facility in Arizona. The three operating wind
generation facilities in California are comprised of the 120MW
Windstar, the 4.5MW Windridge facilities in Tehachapi, and the 30MW Mesa wind generation
facility near Palm Springs.
The facility in Arizona is the
Company's 10.5MW Kingman
integrated solar and wind facility. The Company is further
developing wind and solar energy projects in California, Arizona, and Puerto
Rico.
ON BEHALF OF THE BOARD OF DIRECTORS
"SIGNED"
Jeffrey J. Ciachurski
President & Chief Executive Officer
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
Certain statements contained in this news
release may constitute forward-looking information under applicable
Canadian securities legislation. These statements relate to
future events and are prospective in nature. All statements
other than statements of historical fact may constitute
forward-looking statements or contain forward-looking information.
Forward-looking statements are often, but not always, identified by
the use of words such as "may", "will", "project", "predict",
"potential", "plan", "continue", "estimate", "expect", "targeting",
"intend", "could", "might", "seek", "anticipate", "should",
"believe" or variations thereof. Forward-looking information
may relate to management's future outlook and anticipated events or
results and may include statements or information regarding the
future plans or prospects of the Company.
Forward-looking information is based on certain
factors and assumptions regarding, among other things, the
Company's negotiations with prospective purchasers and the results
of due diligence investigations conducted by prospective
purchasers, the Company's ability to successfully negotiate
non-disclosure agreements with interested parties, the availability
of a financially superior offer, the Company's future growth,
results of operations, performance, business prospects and
opportunities as well as the economic environment in which it
operates. Several factors could cause actual results to
differ materially from those expressed in the forward-looking
statements, including, but not limited to: actions taken by the
Offeror or Brookfield Renewable, actions taken by the Western Wind
Shareholders in relation to the Offer, the possible effect of the
Offer on the Company's business, the outcome of the Company's
previously-announced sale process, the ability of the Company to
successfully negotiate non-disclosure agreements with interested
parties, and the availability of value-maximizing alternatives
relative to the Offer. Additional risks and uncertainties can
be found in the Company's MD&A for the year ended December 31, 2011 and the Company's other
continuous disclosure filings which are available at
www.sedar.com.
Forward-looking statements and forward-looking
information involve known and unknown risks, uncertainties and
other factors that may cause actual results or events to differ
materially from those anticipated. Forward-looking
information is subject to a variety of known and unknown risks,
uncertainties and other factors that could cause actual events or
results to differ from those reflected in the forward-looking
statements including, without limitation: the progress of Western
Wind's sales process, whether the Company is able to successfully
negotiate the terms of non-disclosure agreements with interested
parties, the results of due diligence investigations conducted by
interested parties, and, assuming the Company receives an
expression of interest, whether a financially superior offer for
Western Wind emerges, whether the Company is able to successfully
negotiate a prospective sales transaction and whether the
conditions of any proposed transaction, including receipt by the
Company of all necessary approvals, are met.
The Board of Directors believes that the
expectations reflected in the forward-looking statements contained
in this news release are reasonable, but no assurance can be given
that they will prove to be correct. Actual results and future
events may differ materially from those anticipated and accordingly
forward-looking statements should not be unduly relied upon.
Forward-looking statements contained in this document speak only as
of the date of this news release. Except as required by
applicable law, Western Wind disclaims any obligation to update any
forward-looking information.
SOURCE Western Wind Energy