Clean Power Board Recommends Unitholders Accept Offer by Macquarie Power & Infrastructure Income Fund
- Offer provides superior value for unitholders of Clean Power Income Fund
- Expected by MPT to be accretive to unitholders in first year of combined operations
TORONTO, ONTARIO (April 18, 2007) – Macquarie Power & Infrastructure Income Fund (TSX: MPT.UN – “MPT” or the “Fund”) and Clean Power Income Fund (TSX: CLE.UN and CLE.DB) (“CPIF”) today announced that they have entered into a support agreement under which MPT has agreed to make an offer (the “Offer”) to acquire all of the outstanding units of CPIF. CPIF has agreed to support the Offer upon the terms and conditions set out in the MPT support agreement.
The Board of Trustees of Clean Power Operating Trust (“CPOT”), the sole beneficiary of which is CPIF, has unanimously approved the Offer and determined that the Offer is fair and in the best interests of CPIF and its unitholders. The Board of Trustees of CPOT has also received an opinion from its financial advisors that the consideration to be received under the Offer is fair, from a financial point of view, to CPIF unitholders, and has unanimously resolved to support MPT’s Offer. In addition, the Board of Trustees of CPOT has withdrawn its previous recommendation, no longer supports the offer previously announced by Algonquin Power Income Fund (“APIF”) and recommends that CPIF unitholders accept MPT’s Offer. CPIF unitholders that may have previously deposited their units under the APIF offer should withdraw their units by contacting their securities dealer or broker in order to tender to MPT’s Offer.
“Macquarie Power & Infrastructure Income Fund’s offer provides superior value for Clean Power unitholders as well as an opportunity to participate in a fund with a proven track record of stable performance, growth and value creation for unitholders,” said Mr. Gregory Smith, Chief Executive Officer of MPT. “We anticipate that this transaction will be accretive to distributions per unit in the first year of combined operations. In addition, the new MPT will have a significant platform to pursue further growth opportunities in the North American power infrastructure sector.”
Mr. Allen Jackson, Chairman of CPOT’s Board of Trustees, said, “MPT’s offer represents the best outcome from the continued investigation of unitholder value maximization opportunities subsequent to the APIF offer announced on February 26, 2007. The Board believes that the proposed transaction with MPT is in the best interest of CPIF unitholders and has agreed to support the MPT offer and recommend that CPIF unitholders accept the MPT offer over the previously announced APIF offer.”
As set out in the MPT support agreement, MPT has agreed to offer to CPIF unitholders 0.5581 MPT units and a contingency value receipt (“CVR”) for each unit of CPIF. Each CVR will entitle the holder, subject to certain conditions, to a payment in cash of an amount up to approximately $0.19 per CPIF unit; provided that if any refunds are received from Commonwealth Edison Co., the maximum amount payable under the CVR will increase. The CVRs will represent the right to receive an amount equal to 80% of the balance in the US$7.593 million reserve fund established by CPIF in connection with its sale of Gas Recovery Systems, LLC (“GRS”) together with any refunds received from Commonwealth Edison Co. relating to GRS after reduction for certain claims and costs and after specified adjustments.
Macquarie Power & Infrastructure Income Fund is not an authorised deposit taking institution for the purposes of the Banking Act (Cth) 1959 and Macquarie Power & Infrastructure Income Fund’s obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542. Macquarie Bank Limited does not guarantee or otherwise provide assurance in respect of the obligations of Macquarie Power & Infrastructure Income Fund.
A take-over bid circular containing the full terms of the Offer is expected to be mailed to CPIF’s unitholders and holders of its 6.75% convertible debentures, along with the circular of the Board of Trustees of CPOT and other related documents, in mid-May 2007. MPT’s Offer will be subject to customary closing conditions, including at least 66 2/3% of the outstanding CPIF units being validly deposited under the Offer and there not occurring any material adverse change in the business, facilities, operations, assets or liabilities of CPIF and its subsidiaries and affiliated entities.
MPT is not currently contemplating making an offer for CPIF’s outstanding 6.75% convertible debentures. However, if the Offer is successful, MPT is currently contemplating that a transaction would be undertaken that would result in these debentures becoming obligations of MPT.
The MPT support agreement also provides for, among other things, a non-solicitation covenant on the part of CPIF. In certain circumstances CPIF may terminate the support agreement and the Board of Trustees of CPOT may withdraw its recommendation to CPIF unitholders in accordance with the terms and conditions of the support agreement. In such circumstances, CPIF would be required to pay to MPT a termination fee of $7.0 million, plus up to $1.5 million in expenses.
The MPT support agreement allows CPIF to continue to declare and pay its regular monthly cash distributions to its unitholders and pay interest on its 6.75% convertible debentures, provided that all such payments are made in the normal course consistent with past practice and approved by the Board of Trustees of CPOT or the administrator of CPIF.
The execution of the MPT support agreement followed the announcement earlier today by APIF that it does not intend to exercise its right to match MPT’s previously announced proposal and the termination of the support agreement between APIF and CPIF in accordance with its terms. In connection with the termination of its support agreement, APIF is entitled to a termination fee of $1.75 million and reimbursement of its expenses to a maximum of $850,000 from CPIF.
This news release is not a solicitation of a proxy from any security holder of CPIF, nor is it an offer to purchase or a solicitation of an offer to sell securities.
About Macquarie Power & Infrastructure Income Fund
Macquarie Power & Infrastructure Income Fund invests in infrastructure assets with an emphasis on power infrastructure. MPT’s strategy is to acquire and actively manage a high- quality portfolio of long-life infrastructure assets to improve their financial performance and provide growing and sustainable distributions to unitholders for the long term.
MPT’s infrastructure portfolio includes Cardinal, a 156MW gas-fired cogeneration power station in Ontario, and a 45% indirect interest in Leisureworld Senior Care LP, a leading long-term care provider in Ontario with over 30 years operating experience. MPT is managed by a wholly- owned subsidiary of Macquarie Bank Limited and a member of the Macquarie group. Please visit www.macquarie.com/mpt for additional information.
About Clean Power Income Fund
Clean Power Income Fund is an open-ended investment trust that is invested in 15 power generating facilities located in Que´bec, Ontario, Alberta, British Columbia and four U.S. states with a total capacity of 303 MW. Three environmentally preferred technologies --- windpower, waterpower and biomass --- deliver electricity almost exclusively under long-term sales contracts and at minimal to zero fuel cost. CPIF is the first income fund to be certified under the Government of Canada's Environmental ChoiceM Program. More information about Clean Power Income Fund can be found at www.cleanpowerincomefund.com.
Certain statements in this news release may constitute forward-looking statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different from any future results expressed or implied by such forward- looking statements. Forward-looking statements use such words as “may”, “will”, “anticipate”, “believe”, “expect”, “plan” and other similar terminology. These statements reflect current expectations regarding future events and operating performance and speak only as of the date of this news release. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to risks associated with: the possibility that an offer may not be made by MPT for the CPIF units; the possibility that any offer made by MPT may not be completed; the possible delay in the completion of the offer; the possibility that the anticipated benefits from the acquisition cannot be fully realized; the possibility that the costs or difficulties related to the integration of CPIF’s business with MPT will be greater than expected and business, regulatory and economic conditions. The risks and uncertainties described above are not exhaustive and other events and risk factors including risk factors disclosed in MPT’s and CPIF’s filings with Canadian securities regulatory authorities could cause actual results to differ materially from the results discussed in the forward-looking statements.
The forward-looking statements contained in this news release are based upon information currently available and what Macquarie Power Management Ltd. (the manager of MPT) and CPIF currently believe are reasonable assumptions, however MPT, its manager and CPIF cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this news release, and MPT, its manager and CPIF assume no obligation to update or revise them to reflect new events or circumstances. MPT, its manager and CPIF caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made.
For further information, please contact:
Macquarie Power & Infrastructure Power Fund
Tel: (416) 649 1325
Clean Power Income Fund