TransAlta buys back Renewables

Article Excerpt

TRANSALTA RENEWABLES INC. $13 is a hold. The company (Toronto symbol RNW; Utilities sector; Shares outstanding: 266.9 million; Market cap: $3.5 billion; Dividend yield: 7.2%; Takeover Target Rating: Highest; www.transaltarenewables.com) owns 26 wind and solar farms, 11 hydroelectric facilities, eight natural gas generation plants, two solar power facilities, a natural gas pipeline and one battery storage facility. Those projects are in Canada, the U.S. and Australia. TransAlta Corp. (Toronto symbol TA) first sold shares in TransAlta Renewables on August 9, 2013, at $10 a share. After the IPO, it owned 80% of the renewables business. Later share sales cut that stake to 60.1%. TransAlta Renewables has now accepted a takeover offer from the parent company. Shareholders can opt for either $13.00 a share, or 1.0337 of a TransAlta common share, for each share they hold. TransAlta has capped the cash it will pay at $800 million, as well as the number of shares it will issue (46.4 million, or 15% of its total shares outstanding). As a..