Coal miner Fording (FDG-T) has vowed to fight any attempt by the Sherritt Coal Partnership II to delay Fording’s previously scheduled Dec. 20 shareholder’s meeting. Fording ‘s shareholders a slated to vote on the company’s newly revised plan to convert to an income trust that day. The Sherritt Partnership says it is seeking a court order to postpone the meeting to give Fording’s coveted shareholders time to fully consider the company’s complex deal involving Teck Cominco (TEK-T) and Westshore Terminals Income Fund (WTE.U-T), reports Reuters.
Fording’s chairman, Richard Haskayne, said in a Wednesday press release, “this is an attempt to create an unwarranted delay in allowing our shareholders to vote on this value-enhancing proposal.”
“The shareholders’ meeting should not be postponed to accommodate an unsolicited offer that is demonstrably inferior to the Enhanced Plan of Arrangement announced on December 4,” Haskayne continued.
An Alberta judge is set to hear the application for an interim order on Friday.
The Sherritt Partnership, an alliance of Sherritt International (S-T) and the Ontario Teachers’ Pension Plan, is looking for time to come up with a counter offer to Fording latest three-way conversion plan.
Under Fording’s latest $1.7-billion plan, Teck Cominco joins forces with Westshore Terminals in offering Fording shareholders either $34 or one new income trust unit (or a combination of each) for each Fording share tendered. Teck and Westshore (which operates North America’s busiest coal export terminal, in Delta, B.C.) would each own 13.3% of the trust units, while Fording shareholders would have 73.3%.
The plan calls for Fording’s coal assets to be combined with those of Teck, including the Elkview mine. Teck’s Bullmoose mine, soon to close, is excluded. Westshore would handle the coal under a long-term port services contract at normal commercial terms.
Currently, the Sherritt Partnership’s offer stands at its original $29 per share. The offer expires Dec. 27. In its new information circular, Fording said that it had had talks with Sherritt, but that the two were unable to come to a friendly deal.
In late afternoon trade on Dec. 11, Sherritt shares were 9 higher at $4.25; fording shares were fetching $32.70, a dime up on their previous close.
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