M&A

10 November, 2009

UPDATE 1-Algonquin to buy hydro-power assets from Integrys

* Says to acquire hydroelectric generation assets

* To sell about 6 mln shares to raise C$20 mln

* Offering at C$3.35/shr, 5 pct discount to Tuesday close

* To sell C$55 mln principal amount of debentures

Nov 10 (Reuters) - Algonquin Power and Utilities Corp (AQN.TO) said it agreed with Integrys Energy Services Inc (TEG.N) to buy certain power generation assets in New Brunswick and Maine.

The company said it will buy three hydroelectric generating stations, including the 34.5 MW Tinker Hydroelectric station located on the Aroostook River near the Town of Perth-Andover, New Brunswick.

It will also buy five legacy thermal stations and certain transmission lines near the generating facilities, it said in a statement.

The company, which operates a portfolio of clean, renewable power generation and utility infrastructure assets across North America, said the hydro plants are interconnected to access the north-eastern electricity markets of Northern Maine, New Brunswick and New England.

Separately, Algonquin said it will raise C$75 million by selling shares and convertible debentures, partly to reduce its existing senior short-term bank credit facilities and to finance the hydroelectric generating facility acquisition.

The company said a syndicate of underwriters led by CIBC World Markets Inc and BMO Capital Markets has agreed to buy about 6 million common shares at C$3.35 a share, in a bought deal, for proceeds of C$20 million.

The offer price represents a discount of 5 percent to the stock's Tuesday close on the Toronto Stock Exchange.

The underwriters have also agreed to buy C$55 million principal amount of 7 percent convertible unsecured subordinated debentures due June 30, 2017, Algonquin said.

The underwriters have an over-allotment option of 897,000 shares and C$8.25 million principal amount of debentures on the same terms, the company said.

Shares of the Oakville, Ontario-based company closed at C$3.53 Tuesday.

Integrys shares were down 1 percent at $37.12 in trading after the bell. They closed at $37.60 Tuesday on the New York Stock Exchange. (Reporting by Koustav Samanta in Bangalore; Editing by Unnikrishnan Nair)

Source: http://www.reuters.com