By STEPHAN BURNETT, Weyburn Review Editor
The directors of the Weyburn Inland Terminal and a group of influential WIT shareholders calling themselves Shareholders for Value seem to be squaring off toward another battle for the hearts and minds of WIT shareholders - along with control of the compnay.
This latest in a string of battles over whether to sell the company may occur during an annual meeting scheduled for mid April.
The Shareholders for Value Group is presently shopping around the countryside for support from like-minded WIT shareholders who are interested in selling their shares to a national grain handler. Offers being rumoured for the shares seem to run in the $30 to $35 per share range. But in order to present any offer to the shareholders in a general assembly, Shareholders for Value must first win back control of the board from the present directors.
Critics of Shareholders for Value say the group is discussing issues which were already resolved at a special shareholders meeting on Dec. 10, when 63 per cent of the shares were cast against allowing WIT's directors to explore strategic-alliance talks with a major grain handler.
The Shareholders for Value Group have identified themselves and their membership list includes WIT past presidents such as John Allan, Norm Flaten and Thomas Jones. The group also includes long-time WIT director and secretary-treasurer Ben Kuzmicz, while the spokesman for the group, Alfred Bechard, was the original chairman for WIT and remains as a current director on the board.
Bechard says after the Dec. 10 shareholders vote, many of the shareholders contacted Kuzmicz, Flaten and himself looking for a deal where they could sell 100 per cent of their shares. The offer from UGG to buy the WIT shares was firm at $32 per share, said Bechard.
Currently WIT shares are trading in between $15 and $16.30 per share.
Roy Levee, interim president of WIT, says at $16 per share, WIT has seen an appreciation of market capitalization of over $7 million over the past year, up from $9 per share. Levee also says UGG's $32 per share offer asked for something that was never for sale - control of the company.
"It's about control. Control, control, it's as if it never happened - the vote on Dec. 10 - it just keeps going on and on," said a somewhat exasperated Levee in an interview on Monday.
But Bechard disagrees.
He says the Shareholders for Value Group had no problem accepting what the shareholders said at the Dec. 10 meeting.
"We had no problem with the result, but what happened was we had quite a large number of people who began contacting us about the outcome. They said they were not able to hear all the facts of the negotiations, primarily with UGG but also with Cargill and Agricore. So now they're coming back and telling us, 'I did not want to sell 40 per cent, I wanted to sell them all.'
"There is this group of people developing - some are high profile within the company while others just have 100 shares or so - but they wanted to sell them out. So we thought well, we'd better explore. So we put a plan together and talked to a lawyer to see how this could be done so as to not contravene any securities laws," said Bechard.
Bechard argues the shareholders' vote on Dec. 10 did not give the present board the mandate to fire WIT's president and CEO Norm Flaten, WIT's chairman Bill Watson and WIT's secretary-treasurer Ben Kuzmicz.
"We've had cancellations of board meetings and when we've called they've refused to give us any information," says Bechard who remains a current director on the board.
Bechard said that prior to the Dec. 10 meeting, several grain-handling companies were interested in buying WIT shares but he adds there is no current offer on the table.
Although there is no current offer on the table, a quick poll of the major grain-handling companies proves the interest in WIT shares still exists.
Gordon Cummings, chief executive officer of Agricore Co-op Ltd., admitted he has been in contact with people representing the Shareholder for Value Group. "At this point it's up to the shareholders to decide. It's widely held. It's over 50, in fact, it's over 1,000 and if you're over 50 the rules change. It's up to the shareholders to get their act together. At present, there couldn't be an offer on the table because the current board of governors has decided they don't want an offer on the table. If that changes, our situation might also change," said Cummings.
Len Penner, vice-president of the commodity marketing division for Cargill said WIT shareholders should look to the long term.
"The key for the Weyburn guys is for their shareholders and the board to determine what they want to do and what is in their long-term best interests," said Penner.
Kent Magarrell, assistant vice-president of corporate affairs for Pioneer Grain Company Limited, questioned the whether $30 price quoted at the Dec. 10 meeting was firm, and stipulated the request from the board of governors was not to sell 40 per cent of the company but rather, "to allow board directors permission to move ahead with strategic-alliance talks" - proving just how much specific information the national grain-handling executives have in mind with regard to the Weyburn Inland Terminal issue.
"I was just having a meeting with (president) Curt Vossen when this message came in and to our knowledge no one from our company has been talking to the group, although we haven't had a chance to speak with our Regina manager. We've certainly looked at the Weyburn area, we did a major expansion into the Estevan last year. We gutted an elevator, added storage and trackage and now we have a facility built at Northgate. We have land in the Weyburn area - a good location should we decide to build. But we won't make any future announcements that we're going to build in say three years, because a lot could happen in three years. If we're going to build we'll just go right ahead and do it. But we don't anticipate building this year," said Magarrell.
Brian Hayward, chief executive officer for UGG, added no comment with regard to what UGG's plans were in the area or whether there was an offer on the table. Neither did Hayward comment on the $500,000 penalty provision WIT might suffer for breaking off talks with UGG after Dec. 10.
"I wouldn't want to say if there was or wasn't an offer on the table, I wouldn't want to comment," Hayward said while adding intriguingly "the concept is just too fresh."
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