TransAlta Corporation (NYSE: TAC) directors are facing increasing pressure to sell after a popular activist hedge fund added its voice to a chorus of dissident shareholders. The Children's Investment Fund Management, known as TCI in the investor community, filed its Schedule 13D with the SEC last week showing a six percent stake and demanding some changes. The activist hedge fund wants the company to consider an auction or stragic partnership to boost shareholder value.

Here's a transcript from the letter to the board:

TCI believes  that the public  proposal by LS Power  Equity  Partners and Global Infrastructure  Partners  published  on 21 July 2008 to  acquire  TransAlta  for Cdn$39 per share, significantly undervalues the company.

TCI urges the Special  Committee to immediately  undertake a review of strategic alternatives,  complete  this  expeditiously  and  take all  necessary  steps to maximise value for shareholders.

Further, TCI agrees with the  representations  made to you by Seneca Capital in its  public letter dated 22 July 2008.

TCI  would  welcome  an open and  direct  dialogue  with the  Special  Committee throughout the strategic review process.

TransAlta is a wholesale power generator and marketer focused on the western regions of Canada and the United States. The company owns, operates and manages a contracted and geographically diversified portfolio of assets, and has capability in generation fuels, including coal, natural gas, hydro and renewable energy. Approximately 70% of its capacity is contracted under government-mandated power purchase agreements or long-term contracts.

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