LEXPERT MAGAZINE
|
JULY 2019 7
INDUSTRY
ANALYSIS
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E-Commerce Construction & Engineering
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Aerospace & Defence Automotive
COMPILED BY ELIZABETH RAYMER
Metals & Mining
to standstill, voting and lock-up commit-
ments with customary exceptions. Brook-
field also covenanted to increase its equity
ownership in TransAlta to 9% in open
market purchases over two years, provided
that it is not obliged to purchase common
shares at a price of more than $10 per share.
Brookfield also received a one-time top-up
option that allows it to increase its equity
ownership in the entity holding the hydro
assets up to 49% in certain circumstances,
so long as Brookfield holds at least 8.5% of
TransAlta's common shares and the 20-
day VWAP of TransAlta's common shares
is not less than specified fixed thresholds.
TransAlta has the right aer December 31,
2028, to redeem for cash all or a portion of
the Exchangeable Securities, provided that
all such securities are redeemed within 36
months of the first optional redemption.
e transaction represents a novel use
of exchangeable securities to provide for a
right of exchange into assets of the issuer.
Negotiations were complicated by the
emergence of a significant shareholder,
Mangrove Partners, which later part-
nered with Bluescape Energy Partners and
which together held 10.1% of TransAlta's
common shares. Mangrove and Bluescape
sought to engage with TransAlta to ob-
tain board seats and governance and oper-
ational changes. Mangrove and Bluescape
subsequently filed a joint Schedule 13D
and submitted a notice of intention under
TransAlta's advance notice bylaw to nomin-
ate five directors for election at the upcom-
ing shareholders' meeting. In anticipation of
a potential proxy contest at the sharehold-
ers' meeting and to avoid binding a future
reconstituted board to a trans-
action, TransAlta negotiated
a right to enable a new board
to revisit the Brookfield trans-
action (Governance Out).
Under this novel Governance
Out, if two directors not rec-
ommended by the board were elected at the
2019 meeting, TransAlta would have the
right for 30 days to terminate the Brook-
field transaction. Ultimately, Mangrove
and Bluescape did not run a proxy con-
test; instead, Mangrove brought a "public
interest" proceeding against TransAlta in
opposition to the Brookfield transaction,
before the Ontario Securities Commission
and Alberta Securities Commission, which
was unsuccessful.
TransAlta's single-largest shareholder,
RBC Global Asset Management, public-
ly supported the Brookfield transaction
and entered into a customary voting and
support agreement with TransAlta in con-
nection with the 2019 meeting. Ultimate-
ly, the shareholders elected all of manage-
ment's director nominees to the TransAlta
board. e first tranche of the Brookfield
transaction closed on May 1, 2019.
Davies Ward Phillips & Vineberg
LLP represented TransAlta, with a team
that included Patricia Olasker, Vincent
Mercier, Jennifer Longhurst, David Wil-
son, Gillian Stacey, Anthony Spadaro and
Ghaith Sibai (M&A/corporate); Ian Cros-
bie and Paul Lamarre (tax). TransAlta was
represented in-house by Kerry O'Reilly
Wilks, Robert Millard and Scott Jeffers.
Torys LLP represented Brookfield, with
a team that included Karrin Powys-Lybbe,
Neville Jugnauth, Janan Paskaran, Chris
Christopher and Daniel Masliyah (corpor-
ate/securities), Rose Bailey (lending), John
Tobin and Craig Maurice (tax). Brookfield
was represented in-house by Jennifer Maz-
in, Andrea Rocheleau, Ronnie Ollo and
Adrienne Moore.
Consumer Services Energy & Power Pipelines
Aerospace & Defence Automotive Materials
Utilities Financials Health Research
Media & Entertainment Recreation & Leisure Advertising & Marketing
NORTHLAND POWER INC.
COMPLETES $862.5 MILLION
SECONDARY OFFERING
OF COMMON SHARES
CLOSING DATE: APRIL 5, 2019
Northland Power Holdings Inc. and re-
lated shareholders completed a secondary
offering, including an over-allotment op-
tion, consisting of 36,938,000 common
shares of Northland Power Inc. at a price
of $23.35 per common share, representing
gross proceeds of $862,502,300. North-
land Power Holdings Inc. and the other
selling shareholders are controlled, direct-
ly or indirectly, by James C. Temerty, the
founder of Northland Power.
e offering was made through a syndi-
cate of underwriters on a bought deal basis
led by CIBC World Markets Inc. e syn-
dicate included BMO Nesbitt Burns Inc.,
National Bank Financial Inc., RBC Do-
minion Securities Inc., Scotia Capital Inc.,
TD Securities Inc., Desjardins Securities
Inc., Canaccord Genuity Corp., HSBC Se-
curities (Canada) Inc., Industrial Alliance
Securities Inc. and Raymond James Ltd.
Borden Ladner Gervais LLP repre-
sented Northland Power Inc. and the sell-
ing shareholders with a team led by Paul
Mingay that included Frank Callaghan,
Kent Kufeldt, Jason Saltzman, Robert Eeu-
wes, Joseph DiPonio and Michael Cremers
(Corporate and Securities) and Daniel
Lang (Tax).
e underwriters were represented by
McCarthy Tétrault LLP with a team that
included Jonathan Grant,
Wendi Locke, Michael
Eldridge, Jeremy Pleas-
ant and Zachary Masoud
(Business Law, Construc-
tion and Power) and Ga-
brielle Richards (Tax).
