The 188 million dollar bid by Edmonton entrepreneur Daryl Katz seems to be making some headway after a rocky start.
Canwest news has posted a story in the National Post outlining how the signed acceptance sheets are starting to arrive at Katz central, giving the Rexall Pharmacy owner a running start in his quest to finally land the Edmonton Oilers on his fourth attempt.
The possible quick payment that Kazt has offered seems to have brought a few of the less inclined around to his way of thinking, bringing to an end the bickering and infighting that has been high on the horizon these last few months.
Canwest suggests that Katz has nineteen of the thirty four investors now in his camp, making it likely that his bid will be approved and the team finally transferred into his hands, perhaps as soon as March.
There is still an internal group of the thirty four making their plans to offer a rival bid for the franchise, but time may be running out on them as more and more of the investment group decide it's best to get the cash that is promised now, rather than to wait to see how things may shake out in the next months or more.
The uncertainty of course won't be very helpful to the Oilers on ice management who have a trade deadline ahead of them, a hopeful appearance in a playoff run and then the usual NHL activities of the junior draft and free agent deadlines.
All matters which will require some semblance of leadership from the front office, preferably an office not distracted with infighting and confusion at a key point of the season.
Oilers' owners warming to Katz's offer to buy team
Dan Barnes, Canwest News Service
Published: Sunday, January 20, 2008
EDMONTON - Daryl Katz's $188-million offer to purchase the Edmonton Oilers has swayed "a significant number" of owners who have already sent signed letters of acceptance to the Rexall Pharmacy chain billionaire.
A source close to the negotiations also told Canwest News Service that Katz will close the deal if he receives commitments from Edmonton Investors Group members holding just 60 per cent of the company's 7,492 shares. It had previously been widely reported Katz required 66.66% of shares to complete the purchase.
What's more, if EIG members meet Katz's Jan. 31 deadline for acceptance of his fourth and best offer, the source said those investors will receive cheques, at $20,560 per unit, no later than the end of March. The quick turnaround is likely to placate those among the 34 investors who do not want the sale to become a sordid or lengthy process.
It will certainly appeal to Bruce Saville, a staunch Katz supporter and one of three investors holding the largest chunks of company shares at 9.14% apiece.
"I have been disappointed with the way the board has functioned for the last 10 years," Saville said this weekend. "It soured me against continuing on and that's why I want out. That's why I support Katz."
The list of owners willing to sell to Katz is believed to be 19 deep: Saville, fellow 9.14% shareholder Jim Hole, former chair Cal Nichols, Larry Makelki, Ed Bean, Gordon Buchanan, Manuel Balsa, the Edmonton Journal, Dave Addie, Neal Allen, Tim Melton, Don Hamilton, Rusty Stalwick, Ron Hodgson, Michael Dalton, Brian Hryniuk, Jim Zanello, Todd McFarlane and Ted Barrett. Together they hold about 68% of EIG shares.
If they are all onside with the Katz offer and do not alter their stance, Katz will be able to take over majority ownership of the National Hockey League team, pending approval from the league's Board of Directors.
"I'll sell if he writes the contract up properly," Stalwick said recently. "At $21,000 a unit or whatever, yeah, but everything has to be in order."
Complicating matters slightly is an EIG faction led by new chairman Bill Butler and board member Gary Gregg, the last of the 9.14% men. Sources said Butler and perhaps Gregg will "present options" at today's EIG information meeting. It is believed they are trying to finance a rival or 'Plan B' offer for their fellow owners' shares, possibly with the backing of the Bank of Nova Scotia. Other EIG members known to support the ‘Plan B' offer are Art Mihalcheon, Jakob Ambrosius and Brian Nilsson. The rival faction holds about 22% of the company.
"There are a few guys and Gregg is one of them. Why I don't know and that's up to them," said a major investor. "Once you make a commitment, you make a commitment and if someone comes in the back door I'm not sure I'd be interested. I don't like that back-door stuff. I was on the sell [to Katz] side and I still am.
"If those guys have got the money, they can try to buy it I guess."
Neither Butler nor Gregg immediately returned phone calls while Katz could not be reached for comment.
The list of shareholders who have not committed to either Katz or the 'Plan B' side or whose intentions could not be discerned is comprised of the estate of Gerald Knoll, Dale Sheard, Ernie Elko, Harold Roozen, J.R. Paine and Associates, Keith Weaver, Roger Roberge, Marcel Roberge, Chris Kuchar and Simon Sochatsky. They hold about 10%. Sochatsky would not comment Sunday while the rest could not be reached.
"As a supporter of Katz, I worry the undecided may all go to the alternate bid and Katz might not get 60%," said one major investor. "I just hope those guys will think seriously about the possible outcome if another offer is presented."
If Katz receives commitments for at least 60 per cent of the company shares and buys the team, the dissenting shareholders have two options.
"If he is a nice guy he will then give the holdouts an opportunity to change their mind at the same price," said one major investor. "If they still don't sell they will remain as minority partners where one guy has a super-majority, not a position I would recommend to anyone in any company."
Katz, a born-and-raised Edmontonian, previously offered $145 million, $150 million and $185 million for the team since beginning his quest last spring. In August, after his third offer was rebuffed, then-chairmain Nichols declared the team wasn't for sale. In December, Nichols changed his position and came out in support of the $188 million offer. His about-face was seen as crucial for Katz, since Nichols convinced many investors to join EIG and they have followed his lead for a decade.
The EIG began as a group of 37 investors in 1998 when they purchased the Oilers for $70 million US from the Alberta Treasury Branch which had taken Peter Pocklington's former team into receivership.