Vancouver-based Western Wind put itself up for sale last month in a bid to shake off a steep slump in its stock prices this year, with company officials saying the deal could fetch $500 million (roughly double its current share price). The plan, which would include the Yabucoa project in Puerto Rico, has drawn heat from San Francisco-based investment manager Savitr Capital, which owns about 5 percent of Western Wind shares and is questioning the sale and seeking to replace management and the board of directors.
Since early August, Western Wind has been working with Rothschild as its lead financial adviser in connection with the sale process. PI Financial Corp has also been engaged as a co-adviser on the sale. The assets being sold will include all of its current four producing wind and solar generation facilities in California and Arizona, and the Yabucoa project.
After reviewing a long list of qualified parties in order to identify the most likely buyers, Rothschild has contacted and provided summary marketing materials to over 50 potential acquirers in North America and abroad.
“The sale process is progressing well and has strong momentum,” said Western Wind CEO Jeff Ciachurski.
Ciachurski said the company has either executed or is negotiating non-disclosure agreements with 16 qualified buyers. Parties who have signed non-disclosure agreements have been granted access to the data room and are conducting detailed due diligence. These parties include three leading U.S. utilities with whom the current management team and board of directors have had ongoing discussions from time to time before the sale process was announced.
“We expect the process being led by current management team and Board of Directors and Rothschild to result in a robust auction for the company and all of its assets,” Ciachurski said.
The company also reported that Glass Lewis & Co., a leading independent proxy advisory firm, has recommended that Western Wind shareholders vote in support of the current board.
Glass Lewis concluded in a report this week that the current board and management to possess greater knowledge of the company and its assets, to be best positioned to oversee the sale of the company in a timely and efficient manner, and that electing the dissident nominees could be disruptive to this process.
Glass Lewis also concluded that the current board is best positioned to oversee the development of the Yabucoa project, which the board considers an important asset that will significantly increase the sale price of the company, and to attend to ongoing matters relating to the sale process.
“We are pleased to receive the recommendation of Glass Lewis in support of our current board,” said Ciachurski. “Western Wind has a strong board of directors committed to the sale of the company and a demonstrated record of success.”
Yabucoa Mayor Angel García has also gone to bat for the top brass at Western Wind, saying continuity is key to finishing the solar farm.
Western Wind has already inked a 30 MW solar photovoltaic power purchase agreement with the Puerto Rico Electric Power Authority (Prepa) for a term of 20 years once the Yabucoa facility is operational.
Western Wind also executed a 40-year land lease with the Puerto Rico Land Authority for a 401-acre parcel in Yabucoa.
The Yabucoa project will be bigger than the 24 MW solar farm being developed by Virginia-based AES Corp. in the southcoast town of Guayama.