The Project Rights and the Master PPA may represent an important asset of the Company and provide an opportunity to increase value during the sales process. The Offer, as it was made before the entering into of the Option Agreement, does not ascribe any value to the Project Rights or the Master PPA. The Board of Directors is of the view that the acquisition of an option on the Project Rights and the Master PPA is an example of current management's belief that it can deliver greater value to shareholders than represented by the Offer, and that a Board supported purchaser will have a substantial opportunity to own additional contracted PPA rights. The Option to acquire the Master PPA, if exercised by a board supported purchaser of Western Wind, will provide that purchaser access to a total of 295 MW of contracted PPA's rather than the current 195MW. This is an increase of 51% of total MW under contract that could be acquired by a Board supported purchaser.
Shareholders are urged to consider the Amended Offer carefully, and to read the Notice of Change which will be filed by the Company shortly in its entirety before deciding whether to accept or reject the Amended Offer. Any shareholder who is in doubt as to how to respond to the Amended Offer, including whether or not to tender or to withdraw his or her Shares, should consult his or her own investment dealer, tax advisor, lawyer or other professional advisor.
In the Notice of Change to the Supplementary Directors' Circular issued by the Board of Directors on January 23, 2013, the Company provided information on certain discussions between the Company and Brookfield and an indication from Brookfield that an improvement to the Offer may have been possible. On January 24, 2013, Brookfield announced that it had terminated discussions regarding any alternative transactions to the Offer.
The Company continues to pursue its application with the Ontario Securities Commission for an order requiring Brookfield to prepare and disclose the results of a formal valuation in compliance with Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") as part of the Offer.On January 28, 2013, Brookfield also announced that shareholders holding 9,031,300 Western Wind Shares, or 15.27% of the Shares held by shareholders independent of Brookfield ("Independent Shareholders"), have entered into lock-up agreements with Brookfield (the "Lock-Ups"). The Lock-Ups will terminate if another offer is made for consideration of 5% more than the price under the Offer. Brookfield also announced that it has been advised that an additional 3,971,713 Western Wind Shares, representing approximately 6.7% of the Shares held by Independent Shareholders, will also potentially be tendered to the Offer (the "Intentions to Tender"). Therefore, Brookfield has stated that based on the number of Western Wind Shares that are subject to the Lock-Ups and the Intentions to Tender, shareholders holding 13,003,013 Western Wind Shares, representing approximately 21.97% of the Shares held by Independent Shareholders, have indicated that they will tender to the Offer. The Company wishes to note that, according to Brookfield's public statements, the Western Wind Shares that are subject to the Lock-Ups and the Intentions to Tender have not actually been tendered to the Offer. It is impossible to tell how many Western Wind Shares have been actually tendered to the Offer. Given public statements made by Brookfield regarding the number of Western Wind Shares that are subject to the Lock-Ups and the Intentions to Tender, the Company wishes to note the following regarding the minimum tender condition relating to the Offer as well as Brookfield's ability to acquire Western Wind Shares not deposited to the Offer:
- It is a condition of the Offer that half of the Western Wind Shares held by Independent Shareholders are tendered to the Offer (the "Minimum Tender Condition").
- If, within four months after the date of the Offer, the Offer has been accepted by shareholders who, in the aggregate, hold at least 90% of the Western Wind Shares (other than Western Wind Shares held by Brookfield as of the date of the Offer), Brookfield has stated that it intends, subject to compliance with applicable laws, to acquire (the "Compulsory Acquisition") all the remaining Western Wind Shares on the same terms that the Western Wind Shares were acquired pursuant to the Offer, pursuant to the provisions of applicable corporate law. Western Wind Shares held by Brookfield as of the date of the Offer will not be counted towards the 90% threshold for a Compulsory Acquisition.
- If Brookfield acquires less than 90% of the Western Wind Shares, Brookfield may pursue other means of acquiring the remaining Western Wind Shares not deposited under the Offer (a "Subsequent Acquisition Transaction"). In order to complete a Subsequent Acquisition Transaction, Brookfield must, after taking up Western Wind Shares under the Offer, own at least 66 ⅔% of the outstanding Western Wind Shares on a fully-diluted basis and sufficient votes must be cast by "minority" holders to constitute a majority of the "minority" pursuant to MI 61-101. Brookfield has stated that it intends to cause the Western Wind Shares acquired under the Offer to be voted in favour of such a Subsequent Acquisition Transaction and, to the extent permitted by applicable laws, to be counted as part of any minority approval that may be required in connection with such transaction. However, Western Wind Shares held by Brookfield as of the date of the Offer will not be counted as part of any such minority approval.