CALGARY-BASED AltaGas is well on its way to taking over Pacific Northern Gas following approval by the latter’s shareholders Dec. 12.
More than 99 per cent of the gas utility’s shareholders voted in favour of the deal which is worth $230 million through a combination of paying cash and taking on debt.
PNG will cease to exist as a publicly-traded company and will become a subsidiary of AltaGas.
Under the conditions of a deal announced the end of October, shareholders received $36.75 a share, which represented a 20 per cent premium over the value of a share on Oct. 28, 2011 and a 28 per cent premium of the average price for the 20 trading days before that.
AltaGas has other energy utilities in Canada and is becoming a significant run-of-river player in BC thanks to its development of the 195 megawatt Forrest Kerr project on the Iskut River in northwestern BC.
The company also has plans for two smaller run of river projects in the vicinity of Forrest Kerr.
Together, the three run of river projects will cost approximately $1 billion which, when added to the PNG purchase, gives AltaGas a significant presence in the northwest.
PNG maintains a distribution system in northeastern BC and one in northwestern BC. It also provides propane to a small number of customers in Granisle.
The company began to diversify several years ago into run of river projects of its own on the Sunshine Coast.
AltaGas received the approval of the BC Utilities Commission at the end of November for the purchase of PNG and by the BC Supreme Court Dec. 13, the day after the shareholder vote.
The company is now waiting for regulatory approval by the federal competition bureau.
The purchase by AltaGas made 2011 a lucrative year for PNG shareholders beginning when it sold its ownership stake in the Pacific Trails Pipeline project for $50 million.
The Pacific Trails Pipeline will feed the Kitimat LNG liquefied natural gas plant being planned for Kitimat.
PNG first in March and then in May announced dividend payments of $3 per share each time from the proceeds of the Pacific Trails deal.