The Caisse de dépôt et placement du Québec is coveting the minority stake in Alberta's AltaLink electricity distribution company that SNC-Lavalin Inc. group wants to unload.
"We think that this is an high-quality asset that is rooted in the real economy. It fits perfectly with our [investment] strategy," Maxime Chagnon, spokesperson for the Quebec pension fund manager, said Wednesday.
The board of SNC-Lavalin recently gave the go-ahead to the sale of an unspecified stake in the company that owns more than half of Alberta's transmission grid and that serves 85 per cent of the province's population.
However, the Montreal-based engineering firm did not say in its Monday press release what percentage of AltaLink it would sell, nor how it intended to conclude the transaction. All options are being considered, SNC indicated, including a private transaction, a partnership or a sale through the public markets.
On Wednesday, the Caisse announced that it had acquired close to $20-million worth of SNC shares, at an average price of $44.44. This additional investment raises the Caisse's participation in SNC to 10.2 per cent of the firm's outstanding shares.
Pierre Lacroix, analyst for Desjardins Capital Markets, expects SNC to sell between 20 per cent and 25 per cent of AltaLink, which maintains and operates about 12,000 kilometres of transmission lines.
The sale of this infrastructure is part of the new strategy that president and chief executive officer Robert Card set out at SNC's annual meeting in May. SNC wants to sell a part of its lucrative concessions portfolio, which also includes the 407 Highway toll road near Toronto, and redeploy the proceeds into the engineering and construction business.
The company is specifically targeting the resources sector, which includes oil and gas, mining and metallurgy, and environment and water. While that engineering and construction business has been underperforming of late, Mr. Card believes its holds a greater potential than SNC's infrastructure holdings.