Through the economic development fund that Administer Investissement Québec, the government of François Legault has just invested $ 500 million in Ingx renewable acquisition, which company was created by the deposit and placement fund in order to acquire last spring, innergex renewable energy and privatize it.
What amazing investment! The Government of Quebec is thus part of the skewer of investors who will share 20% of the capital that the fund has invested in the acquisition of Innergex. Fondaction, Desjardins, members of the senior management of Innergex and some Swiss investors are also one of the other investors who participate in said 20% of the capital.
What is surprising to see the Legault government investing half a billion dollars in Innergex?
You should know that the Caisse, as part of the acquisition of Innergex, had bought the block of shares held Hydro-Québec, the main shareholder of Innergex before its privatization by the cash register. The cash register had to pay some $ 556 to Hydro-Québec to get their hands on the 40.5 million Innergex shares held by Hydro.
I summarize the portrait. Investissement Québec (State creature) has just injecting $ 500 million into the cashier (also a state creature) to acquire the portion of the capital that the fund had to pay ($ 560 million) to Hydro-Québec (another state creature) to buy its Innergex shares block!
Why this musical chair game? The answer may be found in this paragraph of decree 958-2025 of July 16 authorizing the investment of $ 500 million in Ingx (Innergex).
“That the sums necessary to supplement any loss or shortfall, all expenses and all costs arising from the mandate entrusted to Investissement Québec by this decree are fired in the economic development fund by the Minister of the Economy, Innovation and Energy on the credits allocated to him for interventions relating to the economic development fund.”
Why did the cash register bought Innergex?
It is undoubtedly in order to ensure that Innergex’s head office remains well anchored in Quebec that the Caisse de Dépôt et Placement has decided to acquire it by buying all the actions in circulation in order to privatize Innergex.
On the other hand, the cash register paid the big price. At $ 13.75 Action, the privatization of Innergex cost at low words some $ 2.8 billion just for ordinary shares. This price represents a bonus of 80% compared to the weighted average course of the action ($ 7.66) during the 30 days preceding the transaction, whose agreement dates back to February 24.
Building in context.
On September 24, 2024, the Board of Directors of Innergex had received “a non-binding indication of confidential and unsolicited preliminary interest of a capital-investment company” for a potential acquisition of all Innergex shares.
The price offered was in the range from $ 14 to $ 15 per ordinary action.
But the offer was accompanied by an essential condition, the signing of a voting support agreement on the part of the Caisse and Hydro-Québec, which, together held 26.5% of the shares.
The problem? No question for the cash register and Hydro-Québec to sell their actions.
On November 4, 2024, it was the Caisse’s turn to demonstrate its interest to acquire all the actions in the circulation of Innergex.
There will be a long private negotiation process, until February 24, 2025, the day of the final agreement.
During this period, another large investor had also expressed his interest to acquire Innergex. But it was out of the question for the cash register and Hydro to sell their actions.
The Caisse Challenge
At $ 13.75 per action, did the cash pay too much the purchase of Innergex?
HIC, it comes down to a name: Donald J. Trump. He devotes himself that the new American president has nothing to wave in the renewable energies sector.
This raises a bad problem for the short -term future of Innergex. For what? Because the United States has 34% of the energy power produced by Innergex.
Thus, during Trump’s four-year term, the fund will not be able to count on the United States to develop Innergex. This is a bad brake on the growth and profitability of Innergex, at least for the next few years.
Innergex had brought back loss of 91 million in 2022 and 105 million in 2023. The company had found profitability in 2024 by declaring a net profit of $ 26.5 million, on revenues of $ 1.05 billion.
Now that the capital of Innergex is closed, will the box agree to disclose the operating results of its new subsidiary?
We’ll see! The cash register currently estimates its investment in Innergex at $ 2 billion. This amount excludes the sums paid by other investors, including the Government of Quebec.
Transparency question
1– Was it necessary that the cash register on Innergex to protect the head office of the Quebec company? I ask the question because by virtue of the “creation of a strategic alliance” between Innergex and Hydro-Québec in 2020, did Hydro-Québec not have a kind of veto that protected the headquarters of Innergex against purchase offers from foreign investors?
2– Did the cash register bought the Innergex shares block that Hydro-Québec held in the design to allow him to bail out part of the losses suffered with his actions? Hydro-Québec paid a large part of its Innergex actions at $ 19 per action. By receiving $ 13.75 per action, Hydro loses approximately $ 5.25 per share of Innergex. How much is the loss of Hydro-Québec in his adventure with Innergex? Around $ 200 million?
3– Does the subscription of $ 500 million in Renewable Acquisition INGX (Innergex) in the purchase of ordinary shares and/or the purchase of privileged shares? It would be relevant for the Legault government to specify exactly in what type of actions it has invested our half-milliard through investment Quebec and the economic development fund.