By KIRSTEN LEATHERDALE, of the Weyburn Review
The battle over control of the Weyburn Inland Terminal is heating up, and as the date of what could be an historic annual general meeting draws near, WIT's current management and the "dissident directors" of Shareholders for Value are pulling out the big guns in an effort to align support.
The latest strategic move by Shareholders for Value - the influential group of WIT shareholders looking to sell their shares to a national grain handler - was to launch a proxy battle to change the board of directors at the company's annual meeting on April 15.
The "Dissident Directors Proxy Circular" was mailed out to WIT shareholders last week, requesting support for their 11 nominees, including four current directors, seven founding WIT directors, and three past presidents and CEOs.
These nominees are up against a slate of directors presented by the current WIT management. Shareholders for Value spokesman Alfred Bechard said in a prepared statement that the group had no choice but to mount this kind of defence, since WIT management broke an historic tradition of having directors nominated and elected individually at the annual meeting.
In an Information Circular mailed to shareholders in advance of the annual meeting, WIT management explained its reasons.
"This year, for the first time, WIT has provided the names of 11 nominees for election to the Board and accordingly is able to grant to every shareholder the right to vote in person or by proxy... The 11 nominees named below seek election to the Board on a common platform of belief in, and defence of, the continued independence of Weyburn Inland Terminal Ltd.
"These nominees oppose the position taken by the Shareholders for Value group, who have organized a campaign to persuade shareholders of Weyburn Inland Terminal to sell their shares and to sell the Corporation itself. Contrary to the views expressed by the Shareholders for Value, the 11 nominees listed below believe that the strength of Weyburn Inland Terminal since its incorporation, and its basis for success in the future, is its status as an independent, farmer-investor owned, innovative grain company," the circular read.
The WIT nominees include nine past and present directors, the current chairman, the current vice-president, and the current secretary-treasurer.
Shareholders for Value want to replace the current directors, who they say "have seized control of the company and are refusing to let shareholders make their own decisions on important matters regarding investment in the company."
Those "important matters" refer to an alliance offer with UGG that could bring a price of $30-$35 per WIT share.
However, at a special shareholders meeting on Dec. 10, 63 per cent of the shares were cast against allowing WIT's directors to explore the alliance further.
Shareholders for Value say the directors should have allowed the shareholders to vote on an actual offer. Because negotiations were cut off, the group says WIT shareholders were exposed to a break-up penalty of $500,000.
"Six directors, who hold less than two per cent of WIT shares, took it upon themselves to deny shareholders a vote on an actual offer, and potentially exposed us to a heavy penalty. It's tyranny by two per cent," said Bechard in the prepared statement.
The group argues that if WIT remains independent in a changing grain environment, share values would likely not rise above the current trading range of $13-$18.
President and CEO Roy Levee's report to shareholders told a different story. Levee reported after tax earnings of $1,867,016 generated by the handling of 370,000 tonnes of grain - "a tremendous accomplishment at a time when competitors are now reporting substantial second quarter losses due to the Canadian Wheat Board's smaller shipping program," read Levee's statement.
The board of directors approved a first-half dividend of 35 cents per common share, $1.60 per preferred A share and $1.50 per preferred B share.
Neither side has limited themselves to a mailing campaign to gain support. Dueling newspaper advertisements with slogans like "What the new WIT executive committee isn't telling you," and "WIT R.I.P. - Hardly," have presented both sides in full view of the public.
Despite the public display, representatives from both sides have preferred to stick to prepared statements, reserving comment on the situation until the showdown on April 15.
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