Editor’s Note: This story contains a statement from Toronto Mayor John Tory denying a report that Toronto Hydro is in discussions to be sold.
Toronto Mayor John Tory is denying a Reuters news agency report that said Canada’s Hydro One Ltd was in talks to buy Toronto Hydro Corp. for about $3 billion.
“I can confirm that no discussions are taking place with respect to the sale of Toronto Hydro to anyone,” Tory said Saturday in an e-mailed statement. “In recent months, I clearly indicated that I would not be supporting any proposal to sell Toronto Hydro.”
Reuters reported the two companies have been in discussions about the deal for the past few months but the talks have not entered final stages, citing several anonymous sources. They cautioned the talks could fall apart. The combined company could generate potential synergies of about $1 billion, the people added.
Reuters reported the city of Toronto, which owns 100 per cent of Toronto Hydro, is also exploring other ways to monetize its assets, including by publicly listing Toronto Hydro, as well as by selling its Green P parking business or other real estate assets. The Green P parking asset, which includes a popular app, is likely worth more than $1 billion, that person said.
Canada’s most populous city needs a massive infrastructure upgrade to meet the growing demands of residents. But the city has struggled to raise sufficient funds to finance its rail and road networks.
Toronto Hydro has also been under financial pressure as it attempts to make infrastructure investments surrounding its electricity grid. Last November, it cut its dividend to the city of Toronto.
Reuters reports a deal would also help Hydro One’s growth ambitions as a public company after it raised $1.8 billion in one of Canada’s biggest IPOs in 2015. Hydro One, backed by the province of Ontario, has a market value of $14 billion.
Under one proposal, Hydro One would pay about half the deal value in cash and the rest in stock, one of the people said, according to Reuters. A cash-and-stock transaction with Hydro One would allow the city to benefit from Hydro One’s dividend as well, the people said.
A spokesman for Hydro One said the company will not speculate on rumours, but added that the new leadership team will “continue to advocate for local customers and act in the best interests of the communities in which we work and live.”
A spokesperson for Toronto Hydro declined to comment. The people declined to be identified as the talks are confidential, according to Reuters.
While refuting the report, Tory said he has “indicated my support for additional City investment in a Toronto Hydro that remained in public hands.”
“We are presently exploring how we can make that investment happen on that basis so that we have a reliable, up to date electricity provider for the people of Toronto,” the mayor said.