Article content

TransAlta Corp., the embattled Alberta power generator under pressure from regulators and because of its indebtedness, has held talks with more than one potential suitor in the past several months, say people familiar with the matter.

The Calgary-based power generation and energy marketing company was near a sale to a group of buyers last week before that transaction fell through, said the people, who asked not to be identified.

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or TransAlta said to have talked to potential buyers for months Back to video

TransAlta, which has more than 70 power plants in Canada, the U.S. and Australia, has a market capitalization of about $1.8 billion after a decline in its share price in recent months. Its stock has plunged more than 40 per cent since the end of April amid price-fixing charges, rising carbon costs and as it struggles with $4.2 billion of debt.

TransAlta shares closed up 1.3 per cent at $6.79 in Toronto on Wednesday after gaining as much as 3.6 per cent earlier.

“Fundamentals have changed here in Alberta and that creates an opportunity for a buyer who might take a more constructive view,” said Patrick Kenny, an analyst at National Bank Financial in Calgary. Private-equity investors could be drawn to TransAlta’s high cash flow, relative to its beaten down share price, Kenny said. The company’s free cash flow yield is now about 20 per cent, he said.