It may not be a blockbuster Labrador hydroelectricity deal, but Emera Inc.’s EMA-T offer to buy the remaining 62 per cent of Light & Power Holdings Ltd. it currently does not own is worthy of mention. To date, last week’s offer has largely gone unnoticed.
Emera first picked up 38 per cent of the Barbados-based electric utility back in May. Assuming the same pricing as the first transaction, which went for $85-million (U.S.), TD Securities estimates the current offer could total about $140-million, bringing Emera’s total outlay to around $225-million.
Emera already has a presence in the Caribbean and TD analyst Linda Ezergailis likes the deal because it will expand the company’s footprint in the region. If Emera takes full operational control of the utility, she also thinks there is a potential of cost savings stemming from Emera’s expertise.
TD expects financing for the acquisition to come from Emera’s current credit facilities.
There is good reason for the deal having been overlooked. Lately, most coverage of Emera has centred on its $1.8-billion investment to partner with Nalcor. The two groups are working together to build the first phase of the Lower Churchill hydro project at Muskrat Falls, with undersea transmission lines from Labrador to Newfoundland, and also to Nova Scotia.
