An oil rig in North Dakota's oil patch. Across the state's active oil fields drilling crews, road builders and those who want to plunge their equipment into the ground often must wait for another team known for slow, meticulous study - archaeologists, whose job is to survey the land before a single spade of dirt can be turned.The Associated Press
The dissident faction at Tuckamore Capital Management Inc. is growing, raising the odds that a controversial management buyout will fail and send the shares higher.
Access Holdings Management, which owns 5 per cent of the company, and Canso Investment Counsel Ltd., which owns about 15 per cent, both came out Tuesday urging other shareholders to vote against the sale to a group that includes Tuckamore managers and private equity fund manager Birch Hill.
The deal requires the approval of two-thirds of votes cast at an upcoming meeting. If turnout for the vote is low, as is often the case in Canadian corporate elections, that leaves the dissidents in a strong position to stop the transaction. The market increasingly is betting that management's 75 cent offer will not go ahead. Tuckamore shares soared 9 cents, or almost 12 per cent, to 87 cents. That's 12 cents greater than the bid price.
Access argues the company is worth closer to $2 a share than to the 75 cents currently on offer from the would-be buyers, and they are critical of the size of the break fees that are part of the transaction. They say part of the proof is that buyout firms usually want big returns – and so, if those big returns are to be had, the price should be higher.
Canso said it believes the offer "significantly undervalues" Tuckamore. Tuckamore is a holding company whose main asset is an oilfield services firm.
"Canso's objective is to maximize the long term value of its holdings in Tuckamore, and believes this objective is currently best met by keeping Tuckamore as a public company. Canso will consider all appropriate actions, including among other actions, exercising its rights of dissent as afforded under corporate law."
The side pushing for the MBO argues that no other buyers are interested at the moment, and that the price is at the high end of the range estimated in an independent evaluation.