BRITISH COLUMBIA

Battle for Western Wind board enters new phase ahead of shareholder meeting

09/20/2012 07:01 EDT | Updated 11/20/2012 05:12 EST
VANCOUVER - A campaign to replace the board of directors at Western Wind Energy Corp. (TSXV:WND) entered a new phase Thursday, as the two sides of a proxy battle ran out of time to win the votes of institutional investors.

At issue is who will oversee a sale of the company, currently with a market value of about $170.2 million.

The Vancouver-based company, which owns and operates wind and solar generation facilities in California and Arizona, announced in July that its board and management had decided to sell the entire company and all its assets.

Western Wind's stock has risen dramatically since the process was announced.

The company is holding its annual general meeting next week, but Thursday was the last day for advance-voting through proxies — usually the preferred method for professional fund managers.

Two major proxy advisory firms that advise such fund managers have come to different conclusions, with Glass, Lewis supporting the incumbents and ISS supporting the five dissident nominees put forward to takeover the board.

Savitr Capital, which has been campaigning to replace the Vancouver-based company's current directors, issued a statement Thursday saying a new board is the only way to be sure Western Wind continues a sale of its assets.

In particular, the fund manager took aim at Western Wind chief executive Jeff Ciachurski — who is also a director of the company — and suggested he'd use his influence to stop the current sales process if the current board stays.

Savitr said if Ciachurski and management's board nominees are re-elected, "there is a real possibility this sale process will be derailed for some self-serving reason."

Western Wind has countered such allegations by stating "the highest bid will not be denied and regardless of market conditions, the highest bid will be forwarded to the shareholders, for their approval."

The company repeated that mantra earlier Thursday in an update on the sales process that said 14 potential buyers of the company and all its assets have been given access to a data room, which has been set up to facilitate the sale process.

In addition, it said five other interested parties were expected to gain access to the data after negotiating non-disclosure agreements.

The decision was described at the time as a compromise between the chief executive's plan to build Western Wind's asset base for two more years and shareholders' frustration with the company's stock price.

Savitr Capital said it has lost confidence in Western Wind's management and board of directors and called for shareholders to install a new board at the company's annual meeting on Sept. 25.

Brookfield Renewable Energy Partners LP (TSX:BEP.UN) subsequently bought a substantial minority equity stake in Western Wind. It paid about $24.4 million to buy about 10.7 million shares of Western Wind and 319,741 purchase warrants.

Brookfield Renewable said it paid $2.25 per common share and $1 per share purchase warrant.

Last October, Algonquin Power and Utilities (TSX:AQN) offered $2.50 in cash or a combination of cash and shares for Western Wind stock. But that offer was quickly rebuffed and Algonquin later withdrew it.

Western Wind shares have since traded as low as $1.08 and as high as $2.67 on the TSX Venture Exchange. They were at $2.46 at Thursday afternoon.