In Canada, the cleantech space is littered with carnage.
The trail of underperforming Canadian stocks, including Timminco (TSX:TIM), which recently filed for creditor protection and Waterloo’s Arise Technologies (TSX:APV), which was delisted from the TSX, in addition to companies like Nevada Geothermal Power (TSXV:NGP) and Alterra Power (TSX:AXY), which lost much of their value in 2011, shows that investors in this sector can fast grow impatient with cleantech companies, big or small, that fail to deliver on their business plans.
Vancouver based Western Wind Energy (TSXV:WND), which has five-hundred wind turbines and a solar field that generates 165 MW of rate capacity, still can only claim scant revenue of $2.3 million for the first nine months of 2011. But management says the company has built an enviable collection of assets and is set to begin to reap the rewards of its hard work. With the colorful events of the past few months, the pressure will be on a confident management team to deliver results in 2012.
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One company that does envy Western Wind’s assets is Algonquin Power (TSX:AQN). On October 11th, Western Wind announced it had received an unsolicited bid of $2.50 a share from Algonquin. The company wasted no time in dismissing the offer, warning investors that it was a lowball attempt and that “Algonquin is clearly not in a position to offer anywhere near a price that can internally utilize both the tax shield and offer Western Wind Energy shareholders the best value.”
Western Wind management said it had conducted two independent valuations that valued its assets at $5.06 per share.
Takeover offers can often be emotional events, but the Algonquin-Western Wind saga, contained a little more cloak and dagger than usual.
Just two weeks before the Algonquin offer, Western Wind notified the notified the Investment Industry Regulatory Organization of Canada that numerous shareholders had complained of “copious amounts of matched trades occurring on a daily basis, with the emphasis being on downward price trading after real-time market orders”. Western Wind management informed IIROC that it had “has been made aware in the past few days, that a certain party would like to make a takeover bid of certain or all of the assets of the company. The suggested offer price to the company is above the current market price…”.
The company informed shareholders “responsibility for down trading and match trading the share price to condition management or the public into accepting the takeover offer can easily be determined by the numerous tools and resources available to IIROC. Some of these market participants have different named entities but ultimately, have mind and control within the same premises.”
Western Wind now faces looming fight, after a proxy solicitation agent, on November 9th, filed to have the names of its shareholders released. But current management looks hunkered down and ready to do battle.
In a November 15th press release, CEO Jeffrey Ciachurski said, confidently “Western Wind Energy’s management is confident and proud to say that there is not another alternate management team or board group that can offer any material performance improvement over the current management and board of Western Wind Energy” Ciachurski pointed out the company’s share price, which is up 400 per cent since early 2009 is evidence that “the market believes in us”
Shares of Western Wind closed Friday down 1.6% to $1.90.