A Calgary-based real estate development company says it is teetering on the edge of a proxy battle with a new activist investment firm run by Stephen Griggs, the former CEO of the Ontario government's employee pension fund.
Genesis Land Development Corp. is concerned that Mr. Griggs and his two-month-old company, Smoothwater Capital Corp., mean to seize control of both the board of directors and, eventually, the company.
Mr. Griggs is not unfamiliar with activism, having previously been the executive director of the Canadian Coalition for Good Governance, where he worked on guidelines for proxy circular disclosure, majority voting and executive compensation.
But he has also proven he isn't afraid of a fight. After a year at the helm of the $14-billion OPSEU Pension Plan Fund (known as OPTrust), Mr. Griggs was terminated, and he then sued his former employer for wrongful dismissal.
When he joined Smoothwater Mr. Griggs called activist investing "a logical next step in my business career."
But Genesis doesn't want to be Mr. Grigg's first conquest. The company said in a letter to shareholders Wednesday that it doesn't want to be used as "a kind of coming-out party for Smoothwater – hoping for a quick win to build a track record, and perhaps attract new investors."
While Smoothwater has yet to launch a formal campaign, Genesis says it was in negotiation with the dissidents until July 17, when its proposal to add several of the dissidents to its board was rejected.
There are other reasons Smoothwater seems threatening. When Mr. Griggs and Mr. Mitchell rolled out their activist firm in May they cited their initial investment of 22 per cent in the company, said they were "communicating with the board of directors and like minded investors with the goal of having the company pursue some or all of these options."
Smoothwater is chaired by Garfield Mitchell, a private investor and director of the W. Garfield Weston Foundation, among other things. He is also the brother of Mark Mitchell, a Genesis board member and real estate finance firm president, according to Genesis.
Mr. Griggs did not immediately respond for comment Wednesday morning.
(Jacqueline Nelson is a Globe and Mail Financial Services Reporter.)
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