Andrea Horwath has pledged to buy back Hydro One bit-by-bit if she’s elected premier June 7, but Bay Street watchers are warning that would be easier said than done. A cornerstone promise of the NDP leader’s campaign is to reduce electricity prices by returning the former Crown utility to full public ownership, reversing a partial privatization by Premier Kathleen Wynne’s Liberal government that raised $9 billion to pay down debt and build infrastructure.But with almost 313 million shares now in private hands, currently valued at $20.45 on the Toronto Stock Exchange, that’s a steep price tag of $6.4 billion to tackle with just $248.5 million in annual dividends that Horwath would use as her initial stake.At that rate, completing the deal could take two decades, not the eight years the NDP is telling voters, stock market experts say. That raises questions about the feasibility of the entire scheme, let alone the long odds of the New Democrats being in power long enough to get it done.“The practicalities of it are pretty daunting,” said veteran lawyer Paul Harricks, leader of the energy sector group at Gowling WLG. Horwath’s time frame works out only if Hydro One shares collapse, falling to $6 or $7, added Ambrus Kecskes, an associate professor of finance at York University’s Schulich School of Business. “I’m not even sure why they would stick their necks out with such rudimentary arithmetic,” Kecskes said.While Bay Streeters say investors would demand a premium of 20 to 30 per cent on the share price, the New Democrats’ plan factors in just 10 per cent.“The strategy is a bad strategy,” said Peter Dey, chairman of investment dealer Paradigm Capital Inc., noting the extra expense of a long-term buyback would be in the $2 billion to $3 billion range and leave taxpayers with sticker shock. “It ups the stakes.”At the current stock price — not including a likely premiu ...
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