Algonquin Comments on Starboard Value Director Nominations

Rhea-AI Summary

Algonquin Power & Utilities Corp. responds to director nominations by Starboard Value LP for the 2024 Annual Meeting of Shareholders. The company is focused on enhancing shareholder value through key initiatives like selling its renewable energy business and repositioning for a more efficient future.

Corporate Governance Expert

The submission of director nominations by an activist investor like Starboard Value LP suggests a strategic move that could influence Algonquin Power & Utilities Corp.'s governance and future direction. The review of these nominees by the Corporate Governance Committee is a critical process that ensures the board's alignment with shareholder interests. The outcome could potentially impact the company's strategic initiatives, including the sale of its renewable energy business and the search for a permanent CEO. These events often lead to shifts in company policy and strategy, which could affect operational efficiency and long-term value creation for shareholders.

Financial Analyst

From a financial perspective, the involvement of a significant shareholder in board nominations often precedes changes in corporate strategy that could affect the company's financial profile. Investors should monitor the situation closely, as the sale of a major division like the renewable energy business could lead to a substantial influx of capital and a possible reallocation of resources. This realignment might enhance or dilute shareholder value depending on the terms of the sale and the efficiency of capital deployment post-transaction. The market's reaction to these developments will be reflected in the stock's performance in the short to medium term.

M&A Legal Expert

The engagement of high-profile legal advisors indicates that Algonquin is preparing for significant corporate actions, which could include defensive measures against activist investors or legal complexities surrounding the sale of its renewable energy business. The legal framework and due diligence surrounding such transactions are intricate and can have substantial implications on the timing and success of the deal. Any delays or legal challenges could affect investor confidence and the company's market valuation.

OAKVILLE, ON, March 22, 2024 /PRNewswire/ - Algonquin Power & Utilities Corp. ("Algonquin" or the "Company") (TSX: AQN) (NYSE: AQN) today issued the following statement regarding the director nominations submitted by Starboard Value LP (together with its affiliates, "Starboard") to stand for election to the Algonquin Board of Directors at the Company's 2024 Annual General Meeting of Shareholders (the "Annual Meeting"):

Algonquin maintains open communications with its shareholders and appreciates constructive input that advances its goal of enhancing shareholder value. The Company is making important progress executing on its key initiatives, including pursuing a sale of its renewable energy business, continuing its search process for a permanent CEO and repositioning the Company towards a more efficient operating profile and a simplified strategy for the future.

The Corporate Governance Committee of Algonquin's Board will review the proposed nominees in accordance with the Company's guidelines. The Board will present its formal recommendation with respect to the election of directors in the Company's management information circular, to be filed with Canadian securities regulatory authorities and the Securities and Exchange Commission and delivered to shareholders eligible to vote at the 2024 Annual Meeting of Shareholders.

Algonquin shareholders are not required to take any action at this time.

J.P. Morgan is serving as financial advisor to Algonquin and Blake, Cassels & Graydon LLP and Weil, Gotshal & Manges LLP are serving as legal counsel.

About Algonquin Power & Utilities Corp. and Liberty

Algonquin Power & Utilities Corp., parent company of Liberty, is a diversified international generation, transmission, and distribution utility with approximately $18 billion of total assets. AQN is committed to providing safe, secure, reliable, cost-effective, and sustainable energy and water solutions through its portfolio of generation, transmission, and distribution utility investments to over one million customer connections, largely in the United States and Canada. In addition, AQN owns, operates, and/or has net interests in over 4 GW of installed renewable energy capacity.

AQN's common shares, preferred shares, Series A, and preferred shares, Series D are listed on the Toronto Stock Exchange under the symbols AQN, AQN.PR.A, and AQN.PR.D, respectively. AQN's common shares, Series 2019-A subordinated notes and equity units are listed on the New York Stock Exchange under the symbols AQN, AQNB, and AQNU, respectively.

Visit AQN at www.algonquinpower.com and follow us on X.com @AQN_Utilities.

Caution Regarding Forward-Looking Information

Certain statements included in this press release constitute "forward-looking information" within the meaning of applicable securities laws in each of the provinces and territories of Canada and the respective policies, regulations and rules under such laws and "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking statements"). The words "will" and "expects" (and grammatical variations of such terms) and similar expressions are often intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Specific forward-looking statements in this press release include, but are not limited to, the Company's pursuit of a sale of its renewable energy business and the review of proposed Board nominees. These statements are based on factors or assumptions that were applied in drawing a conclusion or making a forecast or projection, including assumptions based on historical trends, current conditions and expected future developments. Since forward-looking statements relate to future events and conditions, by their very nature they require making assumptions and involve inherent risks and uncertainties. The Company cautions that although it is believed that the assumptions are reasonable in the circumstances, these risks and uncertainties give rise to the possibility that actual results may differ materially from the expectations set out in the forward-looking statements. There can be no assurance that a sale or other separation transaction regarding the Company's renewable energy business will occur, or that any of the intended benefits and aims of any such transaction will be realized. Forward-looking statements contained herein are provided for the purposes of presenting information about management's current expectations and plans relating to the future and such information may not be appropriate for other purposes. Material risk factors and assumptions include those set out in the Company's Annual Information Form and Annual Management Discussion & Analysis for the year ended December 31, 2023, each of which is available on SEDAR+ and EDGAR. Given these risks, undue reliance should not be placed on these forward-looking statements, which apply only as of their dates. Other than as specifically required by law, the Company undertakes no obligation to update any forward-looking statements to reflect new information, subsequent or otherwise.

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SOURCE Algonquin Power & Utilities Corp.

FAQ

What is the purpose of the statement issued by Algonquin Power & Utilities Corp.?

Algonquin responded to director nominations by Starboard Value LP for the 2024 Annual Meeting of Shareholders.

What key initiatives is Algonquin Power & Utilities Corp. currently focusing on?

Algonquin is pursuing a sale of its renewable energy business, searching for a permanent CEO, and repositioning for a more efficient operating profile.

Who will review the proposed nominees for the election of directors at Algonquin Power & Utilities Corp.?

The Corporate Governance Committee of Algonquin's Board will review the proposed nominees.

Which financial advisor is serving Algonquin Power & Utilities Corp.?

J.P. Morgan is serving as financial advisor to Algonquin.

Who are the legal counsels for Algonquin Power & Utilities Corp.?

Blake, Cassels & Graydon LLP and Weil, Gotshal & Manges LLP are serving as legal counsel to Algonquin.