A nasty battle for control of a grain terminal in Goderich, Ont., ended quickly after the Ontario Securities Commission quashed a poison-pill takeover defence by the target company, Thirdcoast Ltd.
As a result of last Wednesday’s ruling, Thirdcoast’s largest shareholder, Winnipeg agriculture giant Parrish & Heimbecker Ltd., was able to proceed with its takeover bid at $155 a share, valuing the company at $48-million. By last weekend, P&H, which owned 27 per cent of the stock before launching its hostile bid this year, had 88 per cent of the stock. P&H, which extended its original deadline from last Thursday by two weeks, to July 19, plans to buy any untendered shares via a “compulsory acquisition” process.
P&H, a long-standing shareholder of Thirdcoast, decided to bid for the thinly traded, unlisted company to ensure adequate grain storage space for its Ontario wheat mills after the impending demise of the Canadian Wheat Board’s grain-handling monopoly. The private company, managed by fourth-generation members of the two founding families, figured the aging, tornado-damaged 144,000-tonne terminal on the eastern shore of Lake Huron would perfectly match its needs and cost much less than building a new facility elsewhere.
But when the $2-billion Winnipeg company, which had two members among Thirdcoast’s five-member board, informed the company in February it was planning a bid, it touched off a nasty war among directors. Rival factions split off and challenged each other in proceedings before the OSC and Ontario Superior Court. But once the OSC struck down the poison-pill defence Thirdcoast had put in place to buy time to find an alternative deal, the company surrendered to the buyer, saying it didn’t have a better option to offer to shareholders, and recommended that investors tender their shares.
In addition, Thirdcoast also owns a mustard-milling business in Hamilton, Ont., and leases a smaller terminal in the Lake Erie community of Port Colborne.