Algonquin Power & Utilities Corp. is selling its renewable energy business to a subsidiary of LS Power for up to US$2.5 billion.
Wind farms near Bungendore NSW Australia. Saturday 6th July 2024 Photographer: Hilary Wardhaugh/ Bloomberg -- Algonquin Power & Utilities Corp. is selling its renewable energy business to a subsidiary of LS Power for up to US$2.5 billion.
The Canadian utility will receive about $2.3 billion in cash at closing of the transaction, subject to certain adjustments, and up to $220 million of cash through an earn-out agreement regarding some wind assets, according to a statement Friday. The deal was unanimously approved by the board. Earlier this year, activist investor Starboard Value nominated three candidates to join Algonquin’s board. Led by Jeffrey Smith, Starboard has expressed concerns to Algonquin over the past year about succession planning, poor balance-sheet management and an ill-fated attempt to buy Kentucky utilities from American Electric Power Co. It had also urged the company to sell a majority of its renewable assets to reduce debt and improve earnings.
Shares in Algonquin have fallen around 20 per cent over the last 12 months, giving the company a market value of about $4.7 billion.
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