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Water Island Capital, LLC Applauds Institutional Shareholder Services ("ISS") Call for Shareholders to Reject the CPPIB Merger

"On balance, there is insufficient evidence - particularly given the disclosure concerns and the erosion of any control premium by the shift in peer valuations – that the proposed offer is the best alternative available at this time." – ISS Special Situations Research (February 28, 2020)

"Analysis reinforces the conclusion that the downside risk in the most likely standalone scenario is not dramatically below the $26.75 agreed takeout price." – ISS Special Situations Research (February 28, 2020)

Water Island Capital, LLC ("Water Island"), the manager of investment funds beneficially owning 4,059,572 or 4.13% of Pattern Energy Group, Inc. (NASDAQ: PEGI) ("Pattern Energy") common stock, applaud Institutional Shareholder Services ("ISS") in calling on shareholders to reject the CPPIB Merger at the special meeting of Pattern Energy Group shareholders scheduled to be held on March 10, 2020 (the "Special Meeting").

We have reviewed the press release issued by Pattern Energy Group from February 26, 2020. Notwithstanding the self-serving and incomplete responses contained in the Board’s letter, we remain fully convinced that the price paid to Pattern Energy shareholders in the merger transaction is wholly unfair and that the process leading up to the execution of the merger agreement was fraught with conflicts, procedurally unfair, and likely deprived public shareholders of the opportunity of superior bids for Pattern Energy. Water Island is pursuing all options available to maximize shareholder value including aggressively prosecuting the action it has commenced in Delaware Federal Court.


Roger P. Foltynowicz
Portfolio Manager
Water Island Capital, LLC

Edward T. Chen
Portfolio Manager
Water Island Capital, LLC


Certain statements contained in this letter, and the documents referred to in this letter, are "forward-looking statements" and are prospective. These statements may be identified by their use of forward-looking terminology such as the words "expects", "projects", "believes", "anticipates", "intends" or other similar words. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.

These statements are subject to inherent risks and uncertainties surrounding future expectations. Important factors that could cause actual results to differ materially from the expectations set forth in this letter include, among other things, the factors identified under the section entitled "Risk Factors" of Pattern Energy’s special meeting proxy statement and other risk factors contained in Pattern Energy’s Annual Report on Form 10-K for the year ended December 31, 2018. Such forward-looking statements should therefore be construed in light of such factors, and Water Island Capital is under no obligation and expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

About Water Island Capital, LLC

Water Island Capital LLC is a privately-owned asset management firm focused solely on event-driven investment strategies with approximately $2.5 billion under management as of December 31, 2019.

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Roger P. Foltynowicz, 212-584-2369