By KIRSTEN LEATHERDALE, of the Weyburn Review
The Weyburn Inland Terminal will remain independent.
Shareholders at the company's annual meeting voted for continued independence by electing the slate of directors presented by WIT management, Wednesday at McKenna Hall.
In doing so, they rejected the slate of directors put forward by the WIT Shareholders for Value group, and the argument that the company needs to partner with a major grain handler to remain viable.
A whopping 95 per cent of the 1,400 shareholders participated in the historic vote. While most voted by proxy, 500 shareholders crammed the hall to cast their ballot in person and voice their concerns.
After listening to impassioned speeches by representatives from both sides, a long question period, and a nervous wait while the results were being counted, supporters of the Terminal remaining independent let out a loud cheer - and a sigh of relief - when the names of the new directors were announced.
They include Alan Brigden (Kisbey), Claude Carles (Radville), Trevor Dammann (Weyburn), Ed Douglas (McTaggart), Ken Fortner (McTaggart), Jeff Gaab (Weyburn), Harvey McEwen (Francis), Steven Peterson (Midale), Allan Richards (Regina), Dale Slimmon (Heward), and John van Staveren (Creelman).
"I feel elated. You never know what could happen in an election," said board chairman Claude Carles.
The past directors couldn't have predicted what ultimately would happen when they entered into negotiations with United Grain Growers in the fall of 1998.
After months of negotiations - wherein UGG offered to buy 25-40 per cent of all WIT shares at $30-$35 per share - six of the 11 directors voted to cut off strategic alliance discussions because they felt UGG would be gaining too much control over the company.
This decision was reinforced at a Dec. 10 special meeting when the majority of shares were cast against allowing WIT's directors to explore the alliance further.
The five directors in favour of an alliance said shareholders didn't have enough information to make an informed decision, and should have been able to vote on an actual offer.
The group Shareholders for Value was formed, including three members who had been fired from their executive management positions - Bill Watson, chairman, Norman Flaten, president and CEO, and Ben Kuzmicz, secretary treasurer - at a Dec. 18 board meeting.
Since the beginning of 1999, Shareholders for Value and the management of WIT - who began to call themselves Directors for Independence - have been aligning support through aggressive campaigning, leading up to the final showdown on April 15.
Neither side wasted time trying to repair the damage caused over the past few months.
"We represent all 1,400 shareholders. I encourage any opposing slate member to approach us and discuss their concerns. Let's keep this company going, get back to business and remain as 'The Competition.' I hope we don't ever have to go through this again," Carles told the crowd after the vote was announced.
"I want to congratulate the management slate, who presented their case very well. Let's go on with business," said Shareholders for Value spokesman Alf Bechard.
While many shareholders said their minds were made up before the meeting started, both sides made strong arguments aimed at the hearts and minds of voters.
Current president and CEO Roy Levee was the first to speak. He highlighted the accomplishments of WIT since its inception 23 years ago.
"Have you ever stopped to think about all the firsts for the Weyburn Inland Terminal?" asked Levee, who listed protein testing, cleaning grain on the prairies, paying farmers freight and dockage incentives, and others major firsts.
He said the Terminal made money this year while their competitors didn't, paid shareholders a healthy dividend, recently completed a $13.5 million capital expansion, and won the CWB's Quality First shipper award.
"Do you get the impression that we do know a little bit more about running a grain company than some would have us believe?"
Levee addressed concerns that WIT shares are not liquid enough and don't reflect their true value with what he called a "common sense plan."
The plan includes the company offering to buy back a percentage of outstanding common shares each year, starting in 1999, "at a fair price for buyer and seller," and offering for sale units of common shares and warrants "which will enable the next generation of Terminal owners to purchase common shares at a fair price."
Farmers would be able to pay for the common shares with freight and dockage payments, cash, or a check-off from their cash tickets.
Levee left the audience with a few points to consider.
"I'd like you to think about the value of competition; about what it means to have a head office right here in little old Weyburn Saskatchewan; about the last 23 years and all that we've gone through together. I'd like you to think about what it means when we say 'short-term gain for long-term pain.' Because that is what a sellout of the company would mean.
"Let's make this decision like we've made all our decisions for the past 23 years - with our future in mind."
Alf Bechard argued that Shareholders for Value did have the future of the Terminal in mind.
"The past is behind us, and today WIT is at a critical crossroads that has us staring straight into a changing and challenging future."
That challenging future, Bechard said, involves increasing competition offering a total service package (including farm supplies and crop inputs), a need to build global special crop marketing capabilities, the future uncertainty of the Wheat Board and other challenges an independent might not be able to meet.
He didn't think the "common sense plan" Levee talked about could compete with an offer from a major grain handler.
"We believe that price is at least $30, not $15." Currently WIT shares are trading at $12-$18.
"As good as we think 1998 was, bear in mind that 1998 earnings were 40 per cent lower than 1997 earnings. We are very concerned that as competition continues to increase and the business becomes more global, future prospects for an independent WIT could become even dimmer," Bechard said.
Other AGM business included details on the 1998 fiscal year. WIT's after tax earnings totaled $1.86 million. Strong fertilizer and seed sales, livestock feed sales through the new value-adding Pro-Pellet project and record sales at subsidiary Vigro Seed and Supply in Sedley helped keep WIT in the black.
Despite concerns that the emotionally-charged meeting would turn ugly, audience members and nominees remained calm.
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