Weyburn Inland Terminal | Farmers discuss proposal, many speak out against offer from Parrish & Heimbecker
WEYBURN, Sask. — Shareholders opposed to the proposed sale of Weyburn Inland Terminal have urged others to vote against the deal at an upcoming special meeting.
The dissident shareholders said the terminal should remain independent and will be profitable. Eleven men put their names forward as nominees for the board of directors, including two who resigned from the board in December because of a board decision to entertain purchase offers.
“WIT is still a thriving grain company despite the many challenges it’s faced,” said Brent Kosior, one of the 11.
He and others said they have been discussing how to address concerns about liquidity and have ideas. However, all were limited in what they would say, cautioned by their lawyer.
Kosior noted that in 1998 a group wanted to sell WIT to United Grain Growers. Then, 63 percent of the votes cast was opposed to the idea.
“That crisis was averted,” he said, “Since then WIT shares have increased more than five times in value.”
More than 200 people attended the Feb. 4 meeting in Weyburn, where many said they were original shareholders and wanted to see WIT’s independence continue.
Clifford Ganshorn, who farmed near Grand Coulee, Sask., until his retirement, drew applause for his comments:
“I am one of the original shareholders before they ever even poured an inch of cement,” he said. “I have never hauled a bushel here … but I have invested in it. It’s been the greatest investment I ever made in my lifetime, and I am willing to throw away every penny of it to see to it that it stays farmer owned and farmer controlled for the benefit of southern Saskatchewan farmers.”
The current board has endorsed an offer from Parrish & Heimbecker, which has offered $17.25 a share to take over WIT. A special shareholders’ meeting is scheduled for Feb. 28 to vote on the proposal.
One of the concerns expressed at the meeting was what will happen to the condo space at WIT.
Farmers own about 40 percent of the total space at the site.
Michael Mainil said each condo has a separate title and farmers own them, but they don’t know what will happen if the Parrish & Heimbecker deal goes ahead.
“I bought the condo at a value,” he said, referring to his most recent purchase at $7 a bushel. “Is it still at that same value?”
Al Richards, a Regina area farmer who sat on the board from 1981 to 1985 and again from 1999 until his resignation, said WIT has always met challenges head on.
The terminal has 38 percent of market share in the region, leaving competitors Viterra and Pioneer the rest.
“How is it then that the board of WIT has determined that it is impossible to operate as an independent marketer and the company must be sold?” he said.
Richards said he and fellow director Dale Mainil have quit the board, but they didn’t quit the company.
Calling themselves the Shareholders Group, the meeting organizers asked those in attendance for their proxy votes, which the group would use to vote no to the proposed sale at a meeting planned for Feb. 28.
One person in attendance noted that if the takeover occurs, liquidity won’t be an issue because no one will own shares anymore.
At least one in the crowd said perhaps now is the right time to sell, rather than when the company is in trouble.
According to the 2013 third quarter financial statements, WIT earned $1.284 million on grain and $1.7 million on crop production services in the first nine months of the year, before taxes. However, it also lost $1.7 million on its ethanol operations at NorAmera BioEnergy Corp. and $429,000 in other operations.
The deal with P&H would require two-thirds of the shares represented at the meeting to be in favour in order to go ahead.
There are about 5.48 million common shares outstanding and each is entitled to one vote.
Current directors and executive own nearly nine percent of the shares, according to the circulars issued by both the Shareholders Group and the WIT board, and have agreed to vote in favour of the deal.
The company circular notes that the board decided Oct. 26, 2013, to engage in a review that could result in a sale or partial sale of the company.
It says that maintaining “independence as a grain marketer carried significant risk, as the competitive market is increasingly dominated by large multinational corporations” with greater capacity and financial resources.
By the end of November WIT’s board had received six non-binding expressions of interest and by Dec. 7 had entered into an exclusive arrangement with P&H.