MONTREAL, July 13 /CNW Telbec/ - O'Leary Funds Management LP ("O'Leary Funds") confirms it will not accept the amended offer by Boralex Inc. ("Boralex") for all of the issued and outstanding trust units ("BPT.un") of Boralex Power Income Fund (the "Fund"), of which the funds we manage now hold in aggregate over 4 million units (representing approximately 8.95% of units outstanding), because we believe that:
1. although Boralex made minor amendments to its original offer, no
change was made to the proposed $5.00 per unit, which we believe
remains insufficient and is not in the best interests of the Fund's
2. although amended, the terms of the Convertible Debentures offered in
exchange for the Fund units are not sufficient and we believe that the
Convertible Debentures will likely trade at a discount to par, will
provide less income and less upside and will be less tax efficient,
3. an open process to sell the Fund or its assets would generate greater
value than the current amended offer, and
4. the status quo is better than the proposed offer.
Connor O'Brien, CEO of O'Leary Funds and Chief Investment Officer of Stanton Asset Management Inc. ("Stanton", the portfolio advisor to O'Leary Funds) said "In spite of the slight changes to the terms of Boralex's offer, we remain opposed to their amended proposal for the same reasons we highlighted originally: the Fund's investors would suffer a substantial reduction of their after tax cash yield, with no material increase of investment value, and not much chance of selling their investment for fair value."
We continue to believe greater value for the Fund's investors could be generated by an open process to sell the assets or equity of the Fund, because the Fund's cash flow is mostly from its excellent hydro power assets that buyers in an open process would value up to 13 times operating cash flow, yet we see the Boralex offer as an attempt to buy the Fund for only 6.7 times the 2009 operating cash flow and 7.3 times the 2010 estimated operating cash flow. As an alternative, Boralex may further revise its offer to more fully value the Fund and to pay for the acquisition with cash or securities that investors could sell for full fair value. Although the combination of Boralex and the Fund could create an attractive company, we believe that the terms need to be attractive not only for the buyer, but also for the Fund's investors."
SOURCE O'Leary Funds Management LP
For further information: For further information: Connor O'Brien, Chief Executive Officer, O'Leary Funds Management Inc., Chief Investment Officer, Stanton Asset Management Inc., (514) 849-0064 ext 224, firstname.lastname@example.org