Algonquin Power & Utilities Corp. Sends Letter to Gas Natural Inc. Board of Directors

Algonquin Power & Utilities Corp. Sends Letter to Gas Natural Inc. Board of 
Algonquin has Extended Multiple Proposals to Acquire Gas Natural 
Gas Natural Tells Algonquin the Company is "Not for Sale" and Refuses to 
Discuss a Proposed Transaction 
Through its Self-preserving Pursuit of an Undefined and Uncertain Standalone 
Plan, Gas Natural Board is Preventing Shareholders from Receiving an Immediate 
and Compelling Premium for their Shares 
Algonquin Urges Gas Natural Shareholders to Demand that the Gas Natural Board 
Maximize Shareholder Value through a Sale Process 
Algonquin Encourages other Shareholders to Withhold Support for Incumbent 
Directors and Value Destructive Resolutions in Advance of the July 30, 2014 
Annual Shareholders' Meeting 
TORONTO, July 23, 2014 /CNW/ - Algonquin Power & Utilities Corp. ("APUC") 
(TSX: AQN) today announced that it sent the following letter to the Gas 
Natural Inc. (NYSE: EGAS) board of directors: 
July 23, 2014 
Board of Directors Gas Natural Inc. 8500 Station Street, Suite 300 Mentor, 
Ohio  44060 
Dear Sirs: 
As you know, our parent company Algonquin Power & Utilities Corp. ("APUC"), 
currently owns approximately 4.9% of the outstanding shares of Gas Natural. 
Over the past seven months we have sent three letters and reached out numerous 
times to discuss a potential acquisition of Gas Natural by Liberty Utilities 
Co. ("Liberty Utilities"). The proposed transaction would provide an immediate 
and compelling premium to all Gas Natural shareholders. We urge Gas Natural 
shareholders to exercise their rights by insisting that the Board immediately 
commence a process to maximize shareholder value through a sale of the company. 
We have advised that Liberty Utilities is prepared to move quickly to complete 
a transaction with Gas Natural that provides superior shareholder value 
creation with low execution risk, especially when compared to Gas Natural's 
poorly articulated and highly uncertain standalone strategy. 
Notwithstanding, with our parent company being a large holder of Gas Natural 
stock, we share the interest of all shareholders of Gas Natural in maximizing 
shareholder value. To that end, we are supportive of a transaction structure 
that would permit a broader sale process and the realization of more than 
$13.00 per share should a higher offer be made by another qualified party. 
Notably, however, the only way such value can be delivered to Gas Natural 
shareholders is for you to commence a process to maximize shareholder value 
through a sale of the company. 
APUC, the parent of Liberty Utilities, is a growing distribution, generation 
and transmission utility company with approximately $3.7 billion in assets 
across North America, and which operates through two primary business units: 
Liberty Utilities and Algonquin Power Co. Liberty Utilities is a reliable, 
cost effective provider of rate regulated water, electricity and gas 
distribution and transmission utility services to more than 485,000 customers 
across the United States. Liberty Utilities has robust access to capital and a 
firm commitment to investing in the utilities it owns. 
Liberty Utilities continues to grow through strong organic growth and capital 
reinvestment within our utility business and, most importantly, accretive 
acquisitions. The Liberty Utilities management team has a very strong track 
record of successfully acquiring and consolidating regulated utility 
companies, which has produced benefits for all stakeholders. In the last two 
and a half years alone, Liberty Utilities has acquired natural gas 
distribution utilities that provide regulated service to more than 285,000 
customers in six states. 
Our multiple proposals regarding a potential transaction have been 
consistently rebuffed without any negotiation or significant discussion. On 
May 7, 2014, we sent our most recent letter to the Gas Natural board in which 
we expressed interest in acquiring all outstanding shares of Gas Natural at a 
price of $13.00 per share - a premium of approximately 40% to Gas Natural's 
share price as of January 13, 2014, the day before we approached the Gas 
Natural board regarding a transaction. Importantly, the $13.00 per share price 
of our proposal also exceeds Gas Natural's all-time high share price of $12.35. 
Unfortunately, you once again refused to engage in any dialogue. In fact, your 
response letter stated unconditionally that Gas Natural is "not for sale." We 
were, of course, taken aback by such a response, given the challenges facing 
the company. 
We believe that the only viable value maximization strategy is a sale of the 
company for the following reasons: 

    --  Poorly articulated and uncertain growth strategy: Gas Natural's
        management has failed to articulate a clearly quantified growth
        strategy to deliver returns to shareholders superior to those
        provided by our proposal. Whatever management's strategy may
        be, we are confident that Gas Natural's relatively high cost of
        capital and the multiple challenges created by the board and
        senior management described below will continue to impair the
        ability to deliver shareholder value under a standalone plan,
        certainly as compared to the value creation available under our
    --  Poisoned regulatory relationships: After conducting an
        investigative audit of Gas Natural in 2013, the Public
        Utilities Commission of Ohio (PUCO) concluded that certain
        public utility subsidiaries of Gas Natural had "severe
        organizational dysfunction" and openly questioned "the judgment
        of the current management of [such companies] and whether they
        are sufficiently responsible and capable to continue to manage
        a public utility." As reflected by the significant loss of Gas
        Natural's market value following the release of the PUCO's
        findings, we believe that trust between a utility and its
        regulators is a critical driver of value and that, once broken,
        such trust is not easily or quickly reestablished, absent a
        dramatic and fundamental change of the nature that a sale of
        the company would offer.
    --  Inexperienced, nepotistic management team: On May 15, 2014, Gas
        Natural announced that its board of directors had appointed
        Greg Osborne as Chief Executive Officer. It is our
        understanding that the board did so without having conducted
        any formal executive search process. Greg Osborne is the son of
        Richard Osborne, the previous Gas Natural CEO, and does not
        have the utility management experience that we believe is
        necessary to address the significant challenges facing the
        company. We are particularly troubled by his appointment given
        the deteriorated relationship between state regulators and the
        company under the leadership of his father, noted above, and
        the web of relationships between the company and entities
        affiliated with Richard Osborne that have been a primary focus
        of regulator concern. Greg Osborne was, in fact, an officer of
        one or more of these entities during the period in which the
        PUCO determined that dealings between these entities and
        subsidiaries of the company were inappropriate.
    --  Self-admitted dysfunctional board dynamics: We believe that Gas
        Natural is not focused on growth and creating shareholder
        value, but rather on the discord that has plagued senior
        management and the board. In response to public disclosure that
        Mr. Richard Osborne "verbally assaulted several board members
        and physically assaulted a member of the board and the
        company's outside legal counsel," the board recently
        acknowledged that its "ability to function properly" was
        impaired. The board's lack of candor with respect to this
        discord makes it impossible to know how long the shareholders
        of the company have been left adrift, but this dysfunction does
        not appear to be a recent development given the multitude of
        challenges now consuming the company.
    --  Lack of transparency and candor: Gas Natural has on several
        occasions, including with respect to our proposals to acquire
        the company, failed to disclose important information to the
        company's shareholders in a timely manner. The company did not
        publicly acknowledge our acquisition proposals until more than
        a month after solicitation by the board of shareholder support
        for resolutions that the company has acknowledged would impede
        a sale transaction. The board demonstrated a lack of candor in
        its delay of the filing of information with the SEC regarding
        physical boardroom altercations until after the deadline for
        shareholders to submit director nominations had passed; we note
        that the only change between the existing board of directors
        and the proposed slate of directors is the replacement of
        Richard Osborne. And now, with the date of the annual
        shareholders' meeting fast approaching, the board has failed to
        disclose terms of a settlement agreement that we understand was
        apparently reached between the company and Richard Osborne in
        respect of Mr. Osborne's allegations that the board had
        violated its fiduciary duties.
    --  Alleged self-dealing by senior management and board members: A
        shareholder filed a lawsuit in December, 2013, accusing
        director and former Chairman and CEO Richard Osborne and
        director and former CFO Thomas J. Smith of "breaches of
        fiduciary duty and wholesale dereliction of their duties." The
        lawsuit alleges that "knowing that trouble was imminent,
        defendants Richard Osborne… and Thomas J. Smith abused
        their possession of this non-public information by unloading a
        massive amount of stock less than two weeks before the 2013
        [PUCO] order was published." Together with the findings of the
        PUCO in such order, we find the pattern of alleged self-dealing
        impossible to ignore. We also believe it is notable that these
        two directors sold most of their holdings for $10.00 per share,
        which is well below the $13.00 per share price of the Liberty
        Utilities proposal that the board now claims is inadequate.
    --  Proposals to entrench the board and senior management: The
        board has proposed adoption by the shareholders of a resolution
        increasing - and in fact nearly doubling - the number of
        authorized shares of the company, to permit the board to issue
        shares without further shareholder approval. As stated in the
        proxy materials first made public by the board on May 30, 2014
        (a date which should be noted occurs after the submission of
        all three of our acquisition proposals, and merely three weeks
        following our most recent acquisition proposal):
        "This proposal [to increase the number of authorized shares] is
        not being made in response to any hostile attempts by any third
        party to obtain control of the company but the availability for
        issuance of additional shares of common stock could enable our
        board to make more difficult or discourage an attempt to obtain
        control of Gas Natural. . . . As a result, authorizing
        additional common shares may adversely impact shareholders who
        desire a change in management and/or the board or to
        participate in a tender offer or other sale transaction
        involving a change in control of Gas Natural."
        We are encouraging shareholders to assess these statements, and
        the motivation of the board, in the context of the company's
        disclosure, on July 21, 2014, that the company had, in fact,
        received three unsolicited proposals for the acquisition of the
        company from us before the date the proxy materials were first
        made public. We are also encouraging shareholders to note the
        widespread opposition expressed by shareholder rights groups to
        anti-tender offer proposals of this nature on the basis of
        negative impact to shareholder value.

Your refusal to consider a sale of the company in favor of the pursuit of an 
undefined and uncertain standalone plan that preserves control of the company 
by existing directors and senior management ignores the opportunity to rapidly 
rectify the issues noted above through a business combination.

Liberty Utilities' interest in acquiring all of the shares of Gas Natural for 
$13.00 per share today represents a premium to Gas Natural's share price at 
any time over the last several years and we believe that it delivers far 
greater value than Gas Natural can reasonably expect to deliver on a 
standalone basis.

We are confident that Liberty Utilities' scale of operations and robust access 
to capital will allow the customers, regulators and employees of the company 
to reap the rewards of participation in a larger, more capable combined 
entity. Liberty Utilities is a unique, compelling and obvious partner for Gas 
Natural, and would be a willing buyer of all of the outstanding shares of Gas 
Natural at $13.00 per share.


We believe that shareholders deserve a board willing to consider all 
opportunities to maximize value. As we have stated, our preference is to move 
forward with a speedy and friendly transaction. Unfortunately, our attempts to 
engage with you and your management team have been met with little more than 
cursory dismissals. Your response has been, instead, to propose the adoption 
of resolutions that will further entrench the board and senior management and 
facilitate continued disregard for the best interests of the company's 

In light of your continued refusal to engage in a productive dialogue about 
the merits of a transaction to maximize shareholder value, we will be 
encouraging all shareholders to consider what you have failed to consider: 
Maximize Value For Gas Natural's Shareholders Through A Sale Of The Company.

We intend to interact with the company's other shareholders to encourage them 
to urge you to commence a sale process. If you fail to take action, we will 
ask that shareholders join us in voting against the incumbent board of 
directors and the value destructive anti-tender offer resolutions in advance 
of the upcoming July 30, 2014 shareholders' meeting.


David Pasieka President, Liberty Utilities Co.,  A subsidiary of Algonquin 
Power & Utilities Corp.

The Opinion and Order from the Public Utilities Commission of Ohio that is 
referenced in this press release is available at:

About Algonquin Power & Utilities Corp.

Algonquin Power & Utilities owns and operates a diversified $3.7 billion 
portfolio of regulated and non-regulated utilities in North America. The 
regulated utility business provides water, electricity and natural gas utility 
services to over 485,000 customers through a portfolio of regulated 
generation, transmission and distribution utility systems. The non-regulated 
electric generation subsidiary has invested in renewable energy and thermal 
energy facilities representing more than 1,100 MW of installed capacity. 
Algonquin Power & Utilities Corp. delivers continuing growth through an 
expanding pipeline of renewable power and clean energy projects, organic 
growth within its regulated utilities and the pursuit of accretive acquisition 
opportunities. Common shares and preferred shares are traded on the Toronto 
Stock Exchange under the symbols AQN, AQN.PR.A and AQN.PR.D. Visit Algonquin 
Power & Utilities Corp. at and follow us on 
Twitter @AQN_Utilities.

SOURCE  Algonquin Power & Utilities Corp. 
Investors: Kelly Castledine, APUC - Liberty Utilities, 905-465-4576; Media: 
Andrew Siegel / Jennifer Beugelmans, Joele Frank, Wilkinson Brimmer Katcher, 
To view this news release in HTML formatting, please use the following URL: 
CO: Algonquin Power & Utilities Corp.
ST: Ontario
-0- Jul/23/2014 12:45 GMT
Press spacebar to pause and continue. Press esc to stop.