Board of Directors Firmly Recommends Stockholders Vote
"FOR" the Proposed Transaction
SAN FRANCISCO, Feb. 28, 2020 /CNW/ -- Pattern Energy Group Inc.
(Nasdaq and TSX: PEGI) ("Pattern Energy" or the "Company") today
reiterated the firm recommendation of its Board of Directors (the
"Board") that stockholders vote "FOR" the compelling and
certain value of the Company's pending transaction (the
"Transaction") with Canada Pension Plan Investment Board ("CPP
Investments").
The Company issued the following statement in response to a
report issued by independent proxy advisory firm Institutional
Shareholder Services ("ISS"):
We strongly believe that ISS has reached the wrong conclusion in
failing to recommend that Pattern Energy stockholders vote for
"FOR" the proposals related to the Transaction. In doing so,
ISS is recommending that Pattern Energy stockholders forgo the
compelling and certain cash value of the Transaction, and instead
assume that Pattern Energy's stock goes up modestly in the face of
the largest market decline in 40 years and in a historically
volatile sector. Pattern Energy stockholders should ask themselves:
Do two months of affected peer trading outweigh more than five
years of the Company trading at a discount, if the fundamental
issues facing the standalone Company have not changed?
ISS is correct to recognize in its report the "apparent
cleanliness" of the process run by the Special Committee. After
reaching out to the most logical buyers prior to signing and
running a "go-shop" process where subsequent offers had the
opportunity to top the proposed Transaction price, CPP Investments'
bid was the highest and best offer on the table for stockholders.
Pattern Energy stockholders should ask themselves: If there was a
higher offer to be had, why didn't one emerge during or after the
"go-shop" period?
In making its recommendation, ISS has overlooked the compelling
value of the Transaction and the Company's business, history and
standalone prospects:
- The Transaction provides certain value to stockholders at a
significant premium to multiple valuation benchmarks. It also
provides full and fair value for the
development pipeline and other aspects of our plan that the public
markets have never recognized.
- To exceed the $26.75 Transaction
price, Pattern Energy would have to grow at a rate well in excess
of the current management plan. This would require raising
additional equity and possibly other actions, including potentially
cutting the dividend, which we expect would negatively impact our
stock price.
- Stock movements at peer companies reflect unique event-driven
situations at those companies and are not relevant to Pattern
Energy and should not be simply extrapolated to the Company's stock
price. Moreover, the sector remains volatile and the long-term
sustainability of current price levels is uncertain. Investors
should take caution in the significant stock price decreases by the
peer group over the last several days. This volatility stands in
stark contrast to the certainty of the all-cash Transaction.
- The fundamentals of our business and the headwinds we are
facing have not changed. Without this transaction, the Company will
continue to face headwinds as the only U.S. YieldCo without a
financial sponsor. In that scenario, our stockholders would bear
the downside risk associated with the Company's standalone
plan.
- From the start, the process was driven by a Special Committee
of independent directors that was appointed to address the
management conflicts that are inherent in the Company's business
structure. These conflicts are fully disclosed.
- Pattern Development did not block any bids pursuant to any
consent right. In addition, management had no consent rights over
any transactions involving Pattern Energy or Pattern
Development.
The Board urges stockholders to vote "FOR" the
Transaction and related proposals based on the comprehensive
evaluation of the Special Committee and the compelling value
proposition of the Transaction.
The Company continues to expect the Transaction to close by the
second quarter of 2020, subject to Pattern Energy stockholder
approval and other customary closing conditions. Pattern Energy has
received all regulatory approvals required to complete the
Transaction.
Evercore and Goldman Sachs & Co. LLC are acting as
independent financial advisors to Pattern Energy's Special
Committee of the Board, and Paul, Weiss, Rifkind, Wharton &
Garrison LLP is serving as independent legal counsel to the Special
Committee of the Board.
If you have any questions about the special meeting or need
assistance with voting procedures, you should contact:
Innisfree M&A Incorporated
501
Madison Avenue, 20th Floor
New
York, New York 10022
Stockholders
(Toll-Free): 1-888-750-5834
Banks and Brokers
(Collect): 1-212-750-5833
About Pattern Energy
Pattern Energy Group Inc. (Pattern Energy) is an independent
power company listed on the Nasdaq Global Select Market and Toronto
Stock Exchange. Pattern Energy has a portfolio of 28 renewable
energy projects with an operating capacity of 4.4 GW in the
United States, Canada and Japan that use
proven, best-in-class technology. For more information,
visit www.patternenergy.com.
Cautionary Statement Regarding Forward-Looking
Statements
Certain statements contained in this
communication constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 and
"forward-looking information" within the meaning of Canadian
securities laws. Such statements include statements concerning
anticipated future events and expectations that are not historical
facts. All statements other than statements of historical fact are
statements that could be deemed forward-looking statements.
Forward-looking statements are typically identified by words such
as "believe," "expect," "anticipate," "intend," "target,"
"estimate," "continue," "positions," "plan," "predict," "project,"
"forecast," "guidance," "goal," "objective," "prospects,"
"possible" or "potential," by future conditional verbs such as
"assume," "will," "would," "should," "could" or "may," or by
variations of such words or by similar expressions or the negative
thereof. Actual results may vary materially from those expressed or
implied by forward-looking statements based on a number of factors
related to the pending acquisition of the Company, including,
without limitation, (1) risks related to the consummation of the
Merger, including the risks that (a) the Merger may not be
consummated within the anticipated time period, or at all, (b) the
parties may fail to obtain shareholder approval of the Merger
Agreement, and (c) other conditions to the consummation of the
Merger under the Merger Agreement may not be satisfied; (2) the
effects that any termination of the Merger Agreement may have on
the Company or its business, including the risks that (a) the price
of the Company's common stock may decline significantly if the
Merger is not completed, (b) the Merger Agreement may be terminated
in circumstances requiring the Company to pay Parent a termination
fee, or (c) the circumstances of the termination, including the
possible imposition of a 12-month tail period during which the
termination fee could be payable upon certain subsequent
transactions, may have a chilling effect on alternatives to the
Merger; (3) the effects that the announcement or pendency of the
Merger may have on the Company and its business, including the
risks that as a result (a) the Company's business, operating
results or stock price may suffer, (b) the Company's current plans
and operations may be disrupted, (c) the Company's ability to
retain or recruit key employees may be adversely affected, (d) the
Company's business relationships (including with suppliers,
off-takers, and business partners) may be adversely affected, (e)
the Company is not able to access the debt or equity markets on
favorable terms, or at all, or (f) the Company's management's or
employees' attention may be diverted from other important matters;
(4) the effect of limitations that the Merger Agreement places on
the Company's ability to operate its business or engage in
alternative transactions; (5) the nature, cost and outcome of
pending and future litigation and other legal proceedings,
including any such proceedings related to the Merger and instituted
against the Company and others; (6) the risk that the Merger and
related transactions may involve unexpected costs, liabilities or
delays; (7) the Company's ability to continue paying a quarterly
dividend; and (8) other economic, business, competitive, legal,
regulatory, and/or tax factors under the heading "Risk Factors" in
Part I, Item 1A of the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2018, as updated or supplemented by
subsequent reports that the Company has filed or files with the
U.S. Securities and Exchange Commission ("SEC") and Canadian
securities regulatory authorities. Potential investors,
stockholders and other readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date on which they are made. The Company does not assume any
obligation to publicly update any forward-looking statement after
it is made, whether as a result of new information, future events
or otherwise, except as required by law.
Additional Information and Where to Find It
This press
release does not constitute an offer to sell or the solicitation of
an offer to buy any securities or a solicitation of any vote or
approval. This press release may be deemed to be solicitation
material in respect of the Merger. In connection with the proposed
transaction, the Company has filed a definitive proxy statement
with the SEC and Canadian securities regulatory authorities and
mailed the definitive proxy statement and proxy card to each
stockholder entitled to vote at the special meeting relating to the
proposed Merger. STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THE
PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO
AND ANY DOCUMENTS INCORPORATED BY REFERENCE THEREIN) AND OTHER
RELEVANT DOCUMENTS IN CONNECTION WITH THE PROPOSED TRANSACTION THAT
THE COMPANY HAS FILED AND MAY FILE WITH THE SEC AND CANADIAN
SECURITIES REGULATORY AUTHORITIES WHEN THEY BECOME AVAILABLE
BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION.
Stockholders and investors are able to obtain free copies of the
proxy statement and other relevant materials (when they become
available) and other documents filed by the Company at the SEC's
website at www.sec.gov and the website of the Canadian securities
regulatory authorities at www.sedar.com. Copies of the proxy
statement and the filings incorporated by reference therein may
also be obtained, without charge, by contacting the Company's
Investor Relations department at ir@patternenergy.com or (416)
526-1563.
Participants in Solicitation
The Company and its
directors, executive officers and certain employees, may be deemed,
under SEC rules and applicable rules in Canada, to be participants in the solicitation
of proxies in respect of the Merger. Information regarding the
Company's directors and executive officers is available in its
annual proxy statement and definitive proxy statement related to
the proposed transaction filed with the SEC and Canadian securities
regulatory authorities on April 23,
2019 and February 4, 2020,
respectively. Other information regarding the participants in the
proxy solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, is also contained in
the definitive proxy statement and other relevant materials filed
with the SEC and Canadian securities regulatory authorities. These
documents can be obtained free of charge from the Company from the
sources indicated above.
Media Contact
Joele
Frank, Wilkinson Brimmer Katcher
Andy Brimmer / Ed Trissel / Aaron
Palash
212.355.4449
Investor Contact
Scott
Winter / Gabrielle Wolf
Innisfree M&A Incorporated
212.750.5833
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SOURCE Pattern Energy Group Inc.