The $629-million purchase of TransAlta Power LP by Li Ka-Shing’s Cheung Kong Infrastructure Holdings Ltd. doesn’t look like a financial move. Instead, the buyer will likely negotiate (if it isn’t already) to buy TransAlta Corp.’s (NYSE:TAC) remaining 49.99% stake in TransAlta Cogeneration LP that it didn’t get in Monday’s deal.
That’s the view of Desjardins Securities analyst Daniel Shteyn, who reminded clients in a note that this is merely educated speculation.
However, if TransAlta Corp. does sell its stake, he thinks the proceeds could go towards a 20 million share repurchase.
Nonetheless, he is leaving his C$30 price target and “hold” rating on TransAlta Corp. unchanged for now.
TAC 1-yr chart: