The bid by two prairie wheat pools to buy United Grain Growers Ltd. may be dead, but the way it was killed still rankles some shareholders.
Now thanks to a New York-based investment and trading firm, they’ll have a chance to air whatever grievances they have at a special shareholders meeting in Winnipeg on June 26.
UGG’s board of directors called the meeting in response to a request from Oppenheimer and Co., Inc., a New York-based investment and trading firm with a 5.5 percent ownership stake in UGG.
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Oppenheimer says shareholders should have the opportunity to judge the shareholder rights plan adopted by UGG’s board of directors on Feb. 14.
That plan contains the poison pill that prompted Alberta Wheat Pool and Manitoba Pool Elevators to abandon their offer to buy all of UGG’s outstanding common shares for $13.75 a share. The bid was dropped March 18 after a Manitoba court ruled the pools had triggered the poison pill.
In asking for the meeting, Oppenheimer said it believes the plan was used improperly and prevented shareholders from getting the maximum value out of their investment.
“We’ll be there to make that case,” said spokesperson Eric Rosenfeld, adding the company would have liked to see the meeting held even sooner. “We think the poison pill should be removed immediately.”
UGG said the shareholders will be asked to consider three specific issues raised by Oppenheimer.
- Submit the Feb. 14 shareholders rights plan to shareholders for their consideration.
- Prohibit the board of directors from implementing any similar plan without first getting the consent of shareholders.
- Limit the number of common shares that may be issued to the number of shares outstanding on April 9. That is designed to address the mechanics of the poison pill, which would have given all shareholders other than pools the chance to buy large volumes of newly issued shares at a discounted price, drastically reducing the value of the pools’ investment.
UGG officials had little to say last week about the upcoming meeting. Formal notice will be mailed to all shareholders at the end of May.
The two pools still own the biggest chunk of UGG, jointly holding 14.98 percent of the publicly traded stock.
Gordon Cummings, chief executive officer of Alberta Wheat Pool, said the pools will attend the meeting but probably won’t take an active role in debating the merits of the shareholders rights plan.
“At this point I see us voting our shares but that will be the extent of it,” he said. “I really think it’s up to Oppenheimer and the other institutional investors to decide what they want to do with it.”
He said the pools don’t object to UGG having some sort of shareholders rights plan, as long as it’s approved by shareholders, but they do want to to see the current poison pill removed.
Pool officials say removal of the poison pill won’t necessarily prompt a revival of their takeover bid.
“There are other ways to expand our business across the Prairies than this particular acquisition,” said Anders Bruun,. of Manitoba Pool.
