Wilks Brothers running out of appeals to push its Calfrac offer as most acrimonious M&A fight in the oilpatch this year draws to a close
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“We’re chiefly concerned that investors haven’t fully internalized the degree of dilution embedded in the restructuring plan,” Bradford wrote.
Alberta Investment Management Corp. (AIMCo), which manages $119 billion in Alberta’s public sector pension money, confirmed to the Financial Post that it voted in favour of the Calfrac management’s proposal over the Wilks’ offer.
AIMCo was Calfrac’s third-largest shareholder at the time of the vote with 16.5 per cent of the company’s shares and ended up swinging the acrimonious proxy fight away from Wilks and in favour of Calfrac management.
Calfrac’s largest shareholder is the company’s executive chairman Ronald Mathison, who controls 25 million shares through MATCO Investments Ltd. and a numbered company, according to company disclosures.
As new shares in Calfrac are issued, AIMCo’s existing equity stake will be diluted sharply. But AIMCo also owned $30 million of Calfrac’s senior unsecured notes and may be able to offset the dilution by exercising its options on new shares.
AIMCo spokesperson Dénes Németh said in an email the firm would be able to convert its debt into shares but did not specify exactly how many shares it’s entitled to or how its equity stake in the company would change as a result of the transaction.
AIMCo is also the co-owner of Glass Lewis, which had recommended the Wilks’ offer.
The pension investment fund manager’s decision to vote against its own shareholder advisory firm’s recommendation “may devalue Glass Lewis’ services a little in the sense that the owner of your company is not taking your advice,” said Ari Pandes, finance professor at the University of Calgary’s Haskayne School of Business.
But AIMCo said it’s not bound by the advisory firm’s decision.
“AIMCo’s proxy processes are highly robust — guided by our own bespoke proxy voting guidelines and internal assessments, and informed, but not bound, by research from third party independent firms,” Németh said, adding that AIMCo votes with its clients’ “bests interests in mind, so it is not uncommon for AIMCo to vote contrary to the guidance of proxy advisory firms.”
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