Withdrawal comes amid expectations of sharp increases in investor activism and oil sector deals
Proxy solicitation firm Georgeson, owned by Australia-based investor services company Computershare, is withdrawing from the proxy solicitation business in Canada in what it calls ‘a business decision’. The firm, which has built the second-largest presence in the Canadian proxy solicitation sector after 12 years of operations, is also laying off five employees in Canada.
‘We have taken the decision to discontinue our proxy solicitation and advisory services under the Georgeson brand here in Canada,’ Lucie Brouillette, director of marketing for Computershare, told Toronto’s Financial Post newspaper. ‘This is purely a business decision and we thank the five affected Georgeson employees for their hard work and commitment over the past 12 years. From February onwards, we will no longer accept new mandates for proxy solicitation in Canada.’
The withdrawal may bolster the business of Kingsdale Shareholder Services, which is already the dominant player in the sector with about 70 percent of the proxy solicitation market in Canada, the FP says, citing estimates by unidentified sources.
Kingsdale has recently been involved in some of the highest-profile proxy contests in North America, including Pershing Square’s conflict with Canadian Pacific Railway’s board of directors, JANA’s conflict with the board of Agrium and Xstrata’s bid for Falconbridge. The three other firms in the Canadian proxy solicitation sector are Laurel Hill Advisory Group, DF King and Shorecrest Group.
The withdrawal of Georgeson follows restructuring in the sector last year that saw MDC Partners buy a controlling stake in Kingsdale and AST Fund Solutions take over DF King. It also comes amid expectations of increased activity in the sector in 2015, due both to investor activism and financial troubles in the oil & gas sector that could lead to takeovers.
Kingsdale CEO Wes Hall, writing in the October 16, 2014 edition of the FP, said Canadian companies are about to be hit by a wave of investor activism from the US. ‘With successful players like Carl Icahn and Bill Ackman inspiring a new generation south of the border, you can expect more activists to come to Canada in 2015,’ he wrote. ‘But perhaps the [greatest] responsibility for attracting the eye of southern activists lies with the Canadian boards themselves, whose passive approach leaves them vulnerable. Hoping it won’t happen to you isn’t a viable defense strategy.’
