Canadian Hydro: Some Possible White Knights

European investors like renewable energy. They outnumber Canadian and American investors when it comes to clean power, and our continental cousins have some big companies operating in their backyards. And so with Calgary’s TransAlta Corp. (TAC) chasing after Canadian Hydro Developers Inc. (CHDVF.PK), the largest renewable energy company in the Great White North, at least one analyst is turning to Europe in his search to sort out who might serve as a white knight for the wind and hydro power company.

Ben Isaacson, an analyst at Scotia Capital, has picked out six companies which could trump TransAlta’s C$4.55 per share hostile bid.

His thoughts from a recent research note:

1. GDF Suez (GDFZY.PK): “90% of Suez’s renewable assets are hydro, and the company has stated that it is interested in developing its wind business. We think Canadian Hydro could be attractive to Suez to build upon its growing Canadian renewable portfolio.”

2. Scottish & Southern Energy (SSEZY.PK): “Our initial take is that Scottish & Southern Energy is more focused on achieving its mandatory EU renewable targets then expanding into Canada.”

3. EDF Energies Nouvelles (EDFEF.PK): “Most industry observers we have spoken with believe that EDF is not a top candidate to bid on Canadian Hydro due to its size.”

4. Iberdrola Renewables (IBDRY.PK): “We think Iberdrola is looking to de-lever its balance sheet, and accordingly, it’s probably not a top contender to enter an auction process for Canadian Hydro.”

5. Energias de Portugal (EDPFY.PK): “In our minds, the probability is somewhat low that EDP acquires Canadian Hydro as it [EDP] is heavily focused on (1) continued European growth opportunities; and (2) taking advantage of U.S. stimulus bills that could increase equity IRRs on its U.S. wind portfolio.

6. Acciona Energia (ACXIF.PK): “We like the company’s presence in Canada, its knowledge of wind farm development, both as a turbine manufacturer and as an operator. We think that it would not be unreasonable for Acciona to bid on Canadian Hydro.”