Vote expected to go smoothly despite minor objections
TORONTO — A couple of elements that were part of the original proposed merger deal between Canadian communications giants Alliance and Atlantis will be missing when shareholders of both companies vote on the deal today.
Shareholder watchdog Fairvest Securities Corp. complained about the proposed conversion of 288,250 Alliance options to preferred share options for Alliance founder Robert Lantos and his longtime associate Victor Loewy as part of their compensation for the merger. They were also unhappy with Lantos and Loewy keeping options whose terms would be extended for 10 years from issue, another proposal included in the joint management information circular. Canadian media reported that institutional shareholders requested that Alliance and Atlantis drop both proposals from the plan, and they did.
Although the two elements have been dropped from the package that will be the subject of today’s vote, “the alleged shareholder pressure was simply not true,” said Lantos. “It’s something that we decided against some time ago once we got tax advice.” Lantos added that Fairvest’s objections came out after the two elements had already been dropped from the package, and that Fairvest has subsequently published a correction.
“In the context of the entire transaction, that’s a very minor issue,” said Yorkton Securities entertainment analyst Roger Dent, referring to the option conversion. “You’re talking about options on 200,000 and change shares in the context of a company with 25 million shares.”
It’s also a small part of Lantos and Loewy’s deal. If the deal is approved as it now stands, their shares and options will be worth more than C$50 million ($33 million). In addition, Lantos will receive a severance of $4 million and a three-year production deal.
Although Fairvest has also said it expects some of its clients to vote against the resolution that 15% of shares outstanding be set aside for present and future employees by granting options, Dent expects today’s vote to go smoothly: “I think it’ll be a very tame affair.”
Lantos said he also expected the substance of the vote to come off without a hitch.