by DAVE PINK
The last two independently owned grain elevators in southwestern Ontario are almost certain to pass into corporate hands in the near future, says the president of Thirdcoast Limited, which operates the elevators in Goderich and Port Colborne.
Winnipeg-based Parrish and Heimbecker Limited is continuing to pursue a controlling interest in Thirdcoast. Meanwhile, the Thirdcoast directors have been quietly shopping the company around to other prospective buyers that may be willing to outbid the grain handling giant.
“It’s looking as if something is going to happen, and it doesn’t look as if it will be business as usual,” says Don Henry, the president of Thirdcoast since 2000.
“The only real issue is shareholder value. Like any buyer, they want to buy shares as cheaply as possible,” he says. “Ultimately, the company is going to be sold. The real issue for the directors is getting as much money for it as possible.”
The Ontario Securities Commission is expected to rule on the conditions and restrictions of the buyout procedure for both Thirdcoast and P & H on Wednesday.
In a message to shareholders, posted Thursday on the company’s website, the Thirdcoast board of directors said they would not recommend either acceptance for rejection of the buyout offer, but stressed that the company is worth more than the $155 per share that P & H is offering.
The replacement cost of the Goderich terminal, set at between $50 million and $60 million, is well above the buyout offer, the Thirdcoast statement said.
The Goderich grain handling facility has been independently owned since it was built in 1898. As well, Thirdcoast has leased the Port Colborne elevator from the municipality for 25 years, and owns and operates a mustard milling operation in Hamilton.
“This has been a public company since 1898, and a lot of people have had their shares passed down to them. Many people have a long history with this company,” says Henry.
In addition, Henry points out that between 2004 and 2011, Thirdcoast profits have climbed steadily and over that seven-year period shareholders’ dividends have increased 363 per cent. “A lot of investors think Thirdcoast shares are the most valuable in their portfolio,” he says.
“We’re a small company that has flown under the radar, but all of a sudden we seem to have attracted someone’s interest,” says Henry. “When a company is a success it gets attention.”
Spokespeople for P & H could not immediately be reached for comment. BF