- Thirdcoast Limited continues to attempt to frustrate Thirdcoast shareholders' right to decide for themselves on P&H's cash offer, and has now notified P&H that it intends to push through a sale of the Goderich terminal without the approval of Thirdcoast shareholders as soon as July 3, 2012, prior to the July 4, 2012 Ontario Securities Commission hearing at which time P&H is seeking to cease trade the shareholder rights plan instituted without the consent of Thirdcoast shareholders
- P&H continues to use all effective means to support shareholders' right to receive timely payment for Thirdcoast shares they choose to tender to P&H
- P&H recognizes and appreciates the significant shareholder support to date and encourages all shareholders who wish to tender (sell) their shares at a 107% premium to tender their shares as soon as possible to avoid missing this opportunity
- P&H remains committed to the local Goderich economy
WINNIPEG, June 26, 2012 /CNW/ - Parrish & Heimbecker, Limited ("P&H") is providing an update today as to (1) the status of its bid to acquire any and all of the issued and outstanding Thirdcoast Limited ("Thirdcoast") common shares not presently owned by it (the "Bid") for cash consideration of $155.00 per common share (a premium of approximately 107% based on the posted bid price immediately before announcement of the Bid) subject to the terms and conditions set out in the Bid circular and related documentation dated May 31, 2012, and (2) the extraordinary efforts of Thirdcoast management and Committee of Directors to prevent Thirdcoast shareholders from having the opportunity to accept the Bid.
Thirdcoast Continues to Attempt to Frustrate Shareholders Wishing to Benefit from P&H's Cash Offer
Management of Thirdcoast and the committee of the board of directors of Thirdcoast made up of Ian Carter and Robert Paterson (the "Committee of Directors") continue to use Thirdcoast funds to fight an enormously expensive battle in an attempt to keep shareholders of Thirdcoast from being able to exercise their fundamental right to sell their shares, and to entrench management's extremely lucrative roles with the company. In the interim, the best interests of shareholders of Thirdcoast continue to be disregarded:
Attempt to Sell the Company's "Crown Jewel" Without Shareholder Approval - P&H has been formally advised by Thirdcoast that the Committee of Directors and management intend to enter into a binding agreement to sell the Goderich, Ontario terminal asset (the "Asset Sale") as early as July 3, 2012, without seeking approval from Thirdcoast shareholders and without having made any public announcement of its intentions. Given the strategic significance of the Goderich terminal to Thirdcoast, P&H believes the Asset Sale is being pursued by management and/or the Committee of Directors as an improper defensive tactic designed to thwart the right of Thirdcoast shareholders' to decide for themselves whether to sell their shares, and is in violation of applicable corporate/securities laws.
Excessive Bonuses and Salaries - The Committee of Directors have paid management hugely above-market salaries and bonuses as shown in Thirdcoast's March 31, 2012 annual financial statements released last week which reveal executive compensation increasing by almost 70% from $1,071,500 in the prior year to $1,704,408 in fiscal 2012.
Exceedingly Rich Change in Control Severance Payments: Management and Thirdcoast have adopted employment contracts with rich severance payments that are triggered upon termination of certain executives following a change in control of the company, all without transparency to shareholders and without shareholder approval.
Lack of Independent Advice - Management and the Committee of Directors have ignored proper corporate governance practices and the rules of process designed to protect shareholder interests by not retaining independent legal advice: over P&H's formal objections, the Committee of Directors chose to retain the company's legal counsel as its own counsel, thereby ensuring that the legal advice it received would not be independent from Thirdcoast management.
Thwarting Shareholders' Right to Liquidity and Right to Choose to Tender to the Bid - Management and the Committee of Directors continue to drag out the takeover bid process as long as they possibly can, including trying to put a rights plan (poison pill) (the "Rights Plan") in place without requesting approval of the Rights Plan from shareholders. The effect of the Rights Plan is to prevent P&H from taking up shares tendered to its bid. Over 125 days have elapsed since P&H initially made the Committee of Directors aware of its intention to make the Bid and yet the Rights Plan was purportedly adopted at the end of May, 2012 on the eve of P&H's Bid.
Hearing Before the Ontario Securities Commission
In response to the Committee of Directors and Thirdcoast management's defensive tactics, P&H has applied to securities regulators to cease trade the Rights Plan, and advises that a hearing before the Ontario Securities Commission (the "OSC") is scheduled to be held on July 4, 2012. P&H believes that the Rights Plan is an improper defensive tactic. If successful in its application, the Rights Plan will be struck down which will allow shareholders to decide for themselves whether they wish to accept the Bid. Provided that the Rights Plan is cease-traded by the OSC, P&H intends (in accordance with the terms and conditions of the Bid) to take up (purchase) all shares that Thirdcoast shareholders have chosen to tender to the Bid on expiry, which is currently set for July 5, 2012.
P&H has received numerous inquiries from Thirdcoast shareholders as to the effect of the Rights Plan on the Bid. P&H wishes to emphasize that the purported adoption of the Rights Plan has not affected P&H's decision to proceed with the Bid. P&H has received strong support from shareholders to date and shares representing approximately 60% of the outstanding share capital when combined with the shares held by P&H have already shown their support for the Bid and tendered or are projected to tender their shares, such that P&H will control the company upon take up of shares tendered to the Bid. This is in spite of the Committee of Directors' continuing efforts to thwart the Bid.
To be clear, Thirdcoast shareholders may still tender to the Bid notwithstanding the existence of the Rights Plan, and shareholders are strongly urged to show their support for the Bid and the cease trading of the Rights Plan by tendering as soon as possible. See "Instructions for Tendering Shares" below.
Proceedings Before the Ontario Superior Court of Justice
Thirdcoast Attempt to Thwart the Bid by Selling off the Company's "Crown Jewel" Without Shareholder Approval - P&H believes that Thirdcoast management and the Committee of Directors are pursuing the sale of the Goderich terminal, in violation of applicable corporate/securities laws, to thwart the right of Thirdcoast shareholders' to decide for themselves whether to accept the Bid. P&H believes that under applicable law, an Asset Sale of this magnitude (the sale of Thirdcoast's "crown jewel" - the Goderich terminal) would, among other things, require approval by way of a special resolution passed by the vote of shareholders present in person or by proxy at a properly constituted meeting holding in the aggregate two-thirds of the votes cast at the meeting. To protect shareholder rights and the integrity of the Bid, P&H has commenced proceedings before the Ontario Superior Court of Justice and is actively seeking an injunction to prevent the Asset Sale. P&H will vigorously defend the rights of Thirdcoast shareholders before the Court by seeking to prevent or overturn any purported sale of this type.
Shareholders should also note that an Asset Sale provides no guarantee of any cash distribution to Thirdcoast shareholders and creates substantial corporate tax costs and transaction costs to the detriment of Thirdcoast shareholders. It has no purpose other than entrenching current management and the Committee of Directors and does nothing to provide value to shareholders. The Bid is the only real, concrete and clear avenue for maximizing shareholder value.
The timing of the purported Asset Sale is also extremely suspect. On Friday June 22, 2012, Thirdcoast gave P&H ten days' notice (as required by the Court) that "Thirdcoast intends to enter into an agreement with a third party for the sale of its Goderich terminal on or shortly after July 3, 2012" (again, without seeking shareholder approval as P&H believes is required by law) - the day immediately prior to the date the OSC (whose role it is to protect shareholders and the integrity of the capital markets) has the opportunity to rule on cease-trading (effectively terminating) the Rights Plan that was instituted without the approval of Thirdcoast shareholders. P&H believes that the Committee of Directors' intention is to commit Thirdcoast to a binding agreement that could cause P&H to withdraw the Bid due to the sale of the Goderich terminal, and thereby do an end-run around the OSC's hearing on the propriety of the Rights Plan and prevent Thirdcoast shareholders from deciding for themselves whether to tender their shares to the Bid.
In short, P&H believes that an Asset Sale (or a binding agreement in respect thereof) effective July 3, 2012, one day before the OSC hearing to consider the Rights Plan, is designed to circumvent the OSC's authority over the takeover bid process and thwart the Bid before securities regulators have even had an opportunity to address the Committee of Directors' inappropriate conduct. The actions taken by Thirdcoast by and through management and the Committee of Directors are illustrative of their lack of respect for the takeover bid process, securities regulators and most importantly for the shareholders of Thirdcoast and their fundamental right to deal with their shares as they see fit.
Tendering common shares to the Bid now will show shareholder support for the Bid and opposition to the continued oppressive conduct of Thirdcoast management and the Committee of Directors.
P&H assures shareholders of Thirdcoast that it has and will continue to oppose any attempted tactics of Thirdcoast that could deprive the shareholders of Thirdcoast of the opportunity to realize upon P&H's cash offer by participating in the Bid. Shouldn't Thirdcoast shareholders have the right to decide on the future of their company?
P&H's Commitment to the Town and People of Goderich, Ontario:
After successful completion of the Bid, it remains P&H's intention to increase activity within Thirdcoast's business operations and to continue the operation of Thirdcoast's grain handling facilities under the existing public house model with the intent of continuing "business as usual" and providing access to the existing and future customers of Thirdcoast at its elevator and terminal facilities.
P&H also intends to proceed with all necessary steps to change the name of Thirdcoast to its previous name of "Goderich Elevators Limited" as soon as possible after completion of the Bid.
Instructions for Tendering Shares:
Thirdcoast shareholders may tender their common shares to the Bid by returning the letter of transmittal (printed on YELLOW paper) enclosed with the Bid materials mailed to them, together with certificate(s) representing the common shares of Thirdcoast (valid share certificates in the name of Goderich Elevators Limited will also be accepted), to Olympia Transfer Services Inc. in accordance with the rules and instructions set forth in the letter of transmittal accompanying the Bid materials.
Shareholders whose common shares are registered in the name of an investment dealer, stockbroker, bank, trust company or other nominee, should contact such nominee immediately for assistance on how to deposit common shares under the P&H Bid.
Thirdcoast shareholders may also obtain a free copy of the Bid documents online at www.sedar.com.
This release includes forward-looking statements regarding P&H, Thirdcoast and their respective businesses. The forward looking events and circumstances discussed in this release may not occur and actual results could differ materially as a result of known and unknown risk factors and uncertainties affecting P&H, Thirdcoast and their respective businesses. No forward-looking statement can be guaranteed. Forward-looking statements speak only as of the date on which they are made and P&H does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
Winnipeg, Manitoba-based Parrish & Heimbecker, Limited is a 103 year old privately held Canadian company with grain elevators, terminals and flour mills across Canada. P&H has grown into a diversified, vertically integrated company that is committed to agribusiness and the entire agri-food industry. The P&H group of companies covers a wide spectrum of the agribusiness sector, mirroring very closely the diverse face of Canadian agriculture. P&H is actively growing and adapting to meet changing demands of the consumer. For more information, visit http://www.parrishandheimbecker.com.
This press release does not constitute an offer to buy or an invitation to sell, or the solicitation of an offer to buy or invitation to sell, any securities of Thirdcoast. Such an offer may only be made pursuant to an offer and takeover Bid circular filed with applicable securities regulatory authorities. THIRDCOAST SHAREHOLDERS SHOULD READ THE BID DOCUMENTS CAREFULLY BECAUSE THEY CONTAIN IMPORTANT INFORMATION, INCLUDING THE TERMS AND CONDITIONS OF THE BID.
For further information:
For information in respect of the Bid or how to tender your common shares please contact:
Laurel Hill Advisory Group
North American Toll Free: 1-877-452-7184
Email: [email protected]
Banks and Brokers and collect calls outside North America
Olympia Transfer Services Inc.
Telephone (Local) 416-364-8081
North American Toll Free: 866-887-2984
Email: [email protected]