The battle over the future of United Grain Growers was back in a Manitoba courtroom this week.
Oppenheimer and Co., a New York-based financial company that owns 13.2 percent of UGG’s common stock, asked a Court of Queen’s Bench judge to order UGG to hold a special meeting of shareholders June 26.
The hearing was to be held in Winnipeg June 10, so results were unavailable at press time.
The June 26 meeting had been called at the request of Oppenheimer to consider the fate of UGG’s shareholders rights plan.
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But UGG has rescheduled the shareholders meeting to July 17, to consider the issues raised by Oppenheimer and the proposed alliance with Archer Daniels Midland.
Eric Rosenfeld, managing director of operations for Oppenheimer, said his company believes UGG is required by federal law to hold the meeting June 26.
“We don’t think the directors have the power to postpone the meeting once it’s been set,” he said.
He also said a delay is prejudicial to the interest of shareholders because the continued existence of the shareholders rights plan, with its poison pill provision, prevents other companies from making a competing bid for UGG.
Brian Hayward, chief executive officer of UGG, said the company feels it is acting properly.
“Clearly our board has been guided in their deliberations and their determinations by advice that they think is expert,” he said.
UGG argues the proposed strategic alliance between itself and Archer Daniels Midland is an exceptional circumstance that allows postponement of the meeting.
Oppenheimer has proposed three resolutions:
- That shareholders vote on the shareholder rights plan, including the poison pill that killed the takeover bid by two prairie pools.
- That no new plan be put in place without prior approval from shareholders.
- That the number of common shares be limited to those outstanding on April 9, 1997.
The third resolution would directly affect the ADM deal, which would see new shares issued to the U.S. based multinational.
“The ADM deal couldn’t go forward as proposed if our proposal was to to pass,” said Rosenfeld, which makes it important to deal with the Oppenheimer resolutions before the ADM deal is put before shareholders.
However, Hayward said the Oppenheimer resolutions and the ADM deal should be considered by shareholders at the same time.
A ruling was expected to be handed down this week.
