OilVoice - AltaGas Income Trust to Acquire Landis Energy Corporation

AltaGas Income Trust to Acquire Landis Energy Corporation

Sunday, January 17, 2010

AltaGas Income Trust and Landis Energy Corporation have jointly announced that AltaGas Ltd., a wholly-owned subsidiary of AltaGas, and Landis have entered into a support agreement (the Agreement) pursuant to which AltaGas Ltd. will, subject to certain conditions, make a cash offer for all of the outstanding common of Landis. AltaGas Ltd. has agreed to offer $0.80 per common share (the Offer).

The Offer represents a 6.7 percent premium based on the $0.75 closing price of Landis common shares on January 14, 2010 and a 22.7 percent premium to the volume weighted average trading price at which Landis shares have traded for the past 30 days. The acquisition is valued at approximately $22 million. The transaction will be funded through AltaGas' existing facilities.

"The Landis acquisition is a good strategic fit for AltaGas," said David Cornhill, Chairman and CEO of the Trust. "Landis is a developer of underground natural gas storage facilities, focused on opportunities in Atlantic Canada. Gas storage is a business that AltaGas entered last year with the successful commissioning of a 5.3 Bcf gas storage asset in Sarnia, Ontario. Landis adds good opportunities for AltaGas to grow capacity, including the Alton natural gas storage facility, which is in the advanced development phase."

The Alton natural gas storage project, located near Truro, Nova Scotia, is expected to serve customers seeking to manage supply requirements in eastern Canada and the United States. Today there are no underground natural gas storage facilities north of Boston along the Maritimes and Northeast Pipeline route, which runs from Nova Scotia to the northeast United States. Alton Natural Gas Storage L.P. is a limited partnership owned equally by Landis and Fort Chicago Energy Partners L.P. In addition, Landis is pursuing several other projects including underground natural gas storage and underground compressed air energy storage (CAES).

"Over the past several years, the Landis team has made progress with the development of various storage projects," said David Birkett, President and CEO of Landis. "As part of a larger entity, we look forward to proceeding with exciting development opportunities."

The Board of Directors of AltaGas has unanimously approved the Agreement. Likewise, the Board of Directors of Landis has unanimously approved the Agreement and has concluded that the transaction is in the best interest of Landis and is fair to its shareholders. The Board of Directors of Landis has unanimously resolved to recommend that the Landis shareholders tender their common shares in acceptance of the Offer.

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