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Waterford Finance & Investment Limited
Sector: Precious Metals
Challenge: Long-term shareholder Waterford
Finance & Investment Limited decided to become a catalyst
for change after watching its investment in First Calgary Petroleums
Ltd. (FCP) lose 86 % of its value in just over 3 years –
during a period of general market strength for oil companies.
Disillusioned with the inability of FCP’s CEO to deliver
results and the Board’s continued support for the CEO,
Waterford requisitioned a special meeting of shareholders to
replace the FCP Board.
Solution: Despite lavish spending on PR and
advertising by incumbent management, Kingsdale and Waterford
focused on convincing key institutional shareholders and disaffected
retail shareholders about the need for change. The strategy
employed by the Waterford Team worked beautifully, despite that
ISS RiskMetrics Group recommended that its institutional clients
vote for the incumbent slate. Notwithstanding the fact that
over 75% of FCP’s shares were held by institutions and
in spite of the ISS RiskMetrics Group’s endorsement of
the incumbent Board, approximately 55% of the issued and outstanding
shares voted the dissident slate prior to the proxy cut-off.
Two days after the deposit of the dissident proxies, a press
release was issued by FCP (on a Sunday) announcing that a letter
was received from the Algerian Minister of Energy and Mines
expressing concern about the proposed change in FCP management
– FCP’s key assets are located in Algeria. FCP was
then able to obtain a court order delaying the shareholder meeting
by 10 days to allow shareholders to consider the impact of the
Algerian letter.
Result:
Despite the delay and in spite of the letter from the Algerian
Minister, the overwhelming support for Waterford’s nominees
held firm; leading to a negotiated settlement which included
the election of the entire dissident slate of Directors (with
two subsequent resignations in favour of two incumbent nominees)
and FCP CEO’s resignation with his replacement named prior
to the meeting.
According to Michael Kroupeev, Waterford Director, “The
Kingsdale team, led by Wes Hall, did an incredible job for the
Concerned Shareholders of First Calgary Petroleums Ltd. The
strategic advice that Kingsdale gave allowed us to overcome
all of the obstacles we faced in what turned out to be a long
and difficult proxy fight. For a dissident group to get
55 percent of shareholders to support its position shows that
our message was well received by our fellow shareholders and
thanks to our strong network of contacts, coupled with the advice
of Kingsdale and our other advisors, we were able to get that
message out effectively.”
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