TransAlta Power, L.P.
TSX : TPW.UN

TransAlta Power, L.P.

October 15, 2007 09:01 ET

TransAlta Power, L.P. agrees to be acquired

CALGARY, ALBERTA--(Marketwire - Oct. 15, 2007) - TransAlta Power, L.P. (TransAlta Power) (TSX:TPW.UN) today announced it has entered into a support agreement (the Support Agreement) with Cheung Kong Infrastructure Holdings Limited (CKI), pursuant to which CKI has agreed to offer $8.38 in cash per unit (the Offer) to acquire all of the outstanding units of TransAlta Power. The purchase price under the Offer represents a 15.7 per cent premium over the closing trading price of the units on the TSX on October 12, 2007, the last trading day immediately prior to this announcement. The all-cash transaction is valued at approximately $629 million, excluding debt. Under certain circumstances, TransAlta Power has agreed to pay a non-completion fee of $17 million to CKI.

"The Board is pleased to announce the successful completion of the strategic review process conducted by the Independent Committee," said Stephen Mulherin, Chairman of the Board of Directors of the General Partner of TransAlta Power, TransAlta Power Ltd. "Through the process we reviewed a myriad of alternative proposals. The Board has concluded that the sale to CKI provides the best opportunity to maximize unitholder value."

CKI is the largest publicly listed infrastructure company in Hong Kong with diversified investments in Energy Infrastructure, Transportation Infrastructure, Water Infrastructure and Infrastructure Related Business. Operating in Hong Kong, Mainland China, Australia, the United Kingdom, Canada and the Philippines, it is a leading player in the global infrastructure arena. Its expansive energy portfolio comprises both electricity generation and distribution assets, as well as gas companies all over the world.

On May 22, 2007, TransAlta Power announced that an Independent Committee of the Board of Directors of TransAlta Power Ltd., was conducting a review of strategic alternatives for the purpose of maximizing value for the unitholders of TransAlta Power. On the basis of a review of the strategic alternatives available to TransAlta Power, the Independent Committee recommended to the Board of Directors of TransAlta Power Ltd. the entering into of the Support Agreement by TransAlta Power and that acceptance of the Offer be recommended to the unitholders of TransAlta Power.

BMO Capital Markets acted as financial advisor to TransAlta Power Ltd. The Board of Directors of TransAlta Power Ltd. has received a verbal opinion, subject to review of final documentation, from BMO Capital Markets that the consideration to be received under the Offer is fair from a financial point of view to the unitholders of TransAlta Power.

Following a thorough review by the Board of Directors of TransAlta Power Ltd., consultation with its legal and financial advisors and recommendation of the Independent Committee, the Board of Directors of TransAlta Power has unanimously determined the Offer is fair to the unitholders of TransAlta Power. The Board has also determined that it is in the best interests of TransAlta Power and its unitholders that TransAlta Power enter into the Support Agreement and unanimously recommends that unitholders of TransAlta Power accept the Offer.

A take-over bid circular, containing the terms and timing of the Offer, will be mailed to unitholders in the next few weeks, together with a directors' circular. Once mailed, the take-over bid circular and the directors' circular will be available on the Canadian Securities Administrators' System for Electronic Document Analysis and Retrieval ("SEDAR") website at www.sedar.com.

The Offer will be subject to customary conditions, including receipt of all necessary regulatory approvals and at least 66 2/3 per cent of the outstanding units of TransAlta Power having been validly deposited under the Offer and not withdrawn.

About TransAlta Power, L.P.

TransAlta Power, L.P. owns a 49.99 per cent interest in TransAlta Cogeneration, L.P., which owns interests in five gas-fired cogeneration facilities in Ontario, Alberta and Saskatchewan and in a coal-fired, mine-mouth facility in Alberta. These facilities have a total generating capacity of 1,362 megawatts of electric power, all of which is sold under long-term contracts to high-quality counterparties. TransAlta Cogeneration's net ownership is 815 megawatts.

This news release may contain forward-looking statements, including statements regarding the business and anticipated financial performance of TransAlta Power, L.P. and TransAlta Cogeneration, L.P. These statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include legislative or regulatory developments, competition, cost of fuel necessary to produce electricity, global capital markets activity, changes in prevailing interest rates, currency exchange rates, inflation levels and general economic conditions in geographic areas where TransAlta Cogeneration, L.P. operations. For further information on risks or any material assumptions utilized in making these forward looking statements refer to TransAlta Power, L.P.'s Annual Report, Management's Discussion and Analysis under the headings "Risk Factors and Risk Management" and "Critical Accounting Policies and Estimates" and under the heading "Outlook" in TransAlta Power, L.P.'s Second Quarter Management's Discussion and Analysis. TransAlta Power, L.P. undertakes no obligations to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise.

Note: All financial figures are in Canadian dollars unless noted otherwise.

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