The departure of two senior executives at TransAlta Corp. (NYSE:TAC) may be a sign that it is not an imminent takeover target. The electric company has seen it shares climb nearly 20% in the past month on buyout speculation and has been the subject of rumors for longer on merger and acquisition activity in the utility space.
However, given the change of control payments that would be made to senior management in the event of a takeover, the departure of executive vice presidents Linda Chambers and Tom Rainwater likely means a takeover offer is not coming soon, RBC Capital Markets analyst Robert Kwan wrote in a research note, adding that they would likely have been aware of such a bid.
If a successful change of control was initiated by someone other than TransAlta’s board of directors, both Ms. Chambers and Mr. Rainwater would be entitled to payments of $1.8-million and $2-million respectively, based on 2006 figures, Mr. Kwan said.
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