Calgary skyline in August, 2012.Chris Bolin/The Globe and Mail
The proxy fight between a Calgary-based real estate developer Genesis Land Development Corp. and Stephen Griggs' activist investor firm Smoothwater Capital Corp. has been settled in a compromise.
Last week Streetwise reported that the dissidents were served a blow when Alberta's superior court ruled that the proxy battle had involved activist investor collaboration without appropriate disclosure. These proxy fight disclosure rules are in place to prevent groups from building up large stakes in a company and avoiding the payment of shareholder premiums.
After this victory for Genesis, the company was able to strike an agreement with the activist group to end its quarrel. Smoothwater agreed to support the election of the following board of directors: Yazdi Bharucha, Michael Brodsky, Steven Glover, Mr. Griggs, Loudon Owen, Mark Mitchell, William Pringle and Iain Stewart.
The nominees signal a middle ground was reached between activist and target, since many of those nominees for the board are connected to Smoothwater. Existing board member Mr. Mitchell, for example, is the brother of Smoothwater's chairman Garfield Mitchell. Mr. Griggs has also gained a seat.
The two sides also agreed on a few other initiatives including a committee that will review the company's "strategic options," and Genesis's reimbursement of "reasonable costs incurred arising from the proxy contest."
"This process has been extraordinarily expensive and disruptive for Genesis," Mr. Griggs said in a statement, noting he was glad to see an end to the dispute.
(Jacqueline Nelson is a Globe and Mail Financial Services Reporter.)
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