{"id":31461,"date":"2015-12-04T19:00:51","date_gmt":"2015-12-05T00:00:51","guid":{"rendered":"http:\/\/prefblog.com\/?p=31461"},"modified":"2015-12-04T19:00:51","modified_gmt":"2015-12-05T00:00:51","slug":"dc-pr-c-coercive-offer-attracts-wider-notice","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=31461","title":{"rendered":"DC.PR.C: Coercive Offer Attracts Wider Notice"},"content":{"rendered":"

Assiduous Readers will recall that I harshly criticized Dundee’s recent proposal in the post DC.PR.C: Coercive Exchange Offer<\/a>.<\/p>\n

Now Niall McGee of the Globe has penned a piece titled Dundee faces backlash over new share-exchange plan<\/a>:<\/p>\n

Dundee\u2019s share-exchange plan has raised the ire of a prominent fund manager, a high-profile shareholder rights group and \u2013 according to multiple sources \u2013 has caused consternation among the company\u2019s institutional shareholder base.<\/p>\n

Dundee is under financial pressure, having lost more than $400-million in the year to date, primarily due to heavy exposure to the cratering resource sector. Last week, the company unveiled a proposal designed to take pressure off its balance sheet.<\/p><\/blockquote>\n

Mr. McGee was kind enough to quote me in the article:<\/p>\n

James Hymas, president of Hymas Investment Management Inc., says these payments, which are roughly eight times higher than average, represent \u201ca huge conflict of interest\u201d for brokers and are \u201ccoercive\u201d to shareholders.<\/p>\n

\u201cYou get money for voting yes. But if you vote no and the offer goes through anyway, then you get squat. That makes it coercive,\u201d Mr. Hymas said. He runs a preferred share mutual fund and publishes a daily commentary on preferred shares. Neither he nor his clients have any position in Dundee\u2019s preferred shares.<\/p><\/blockquote>\n

And a regulators’ puppet group<\/a> has joined the fray:<\/p>\n

\u201cThese types of payments are deeply troubling,\u201d said Neil Gross, executive director of FAIR Canada, an independent shareholder rights advocacy firm.<\/p>\n

\u201cIt\u2019s not just that they give advisers a financial incentive to bias their advice. It\u2019s that they do it so overtly \u2013 revealing that the financial industry still hasn\u2019t internalized the principle that conflicts of interest are incompatible with investment professionalism.\u201d<\/p><\/blockquote>\n

It always makes me laugh<\/a> to hear those guys talk about conflicts of interest<\/a>!<\/p>\n

You can make up your own minds about Dundee’s defence:<\/p>\n

Dundee chief executive officer David Goodman defended the proposal.<\/p>\n

\u201cI believe our structure is fair. It\u2019s transparent. It\u2019s in the best interest of Dundee Corporation and it\u2019s consistent with industry custom,\u201d he said in an interview.
…<\/b>
Mr. Goodman says one of the reasons the payments are necessary is that Dundee needs brokers to get the word out about the vote. He also said he has no concerns about advisers giving biased advice in this instance.<\/p>\n

\u201cI have a very high appreciation for the integrity and value that the financial advisers provide and I don\u2019t believe that the receipt of a solicitation fee for their services is going to compromise their ability to properly advise their clients.\u201d<\/p><\/blockquote>\n

We’ll see how it goes!<\/p>\n","protected":false},"excerpt":{"rendered":"

Assiduous Readers will recall that I harshly criticized Dundee’s recent proposal in the post DC.PR.C: Coercive Exchange Offer. Now Niall McGee of the Globe has penned a piece titled Dundee faces backlash over new share-exchange …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13,19],"tags":[],"class_list":["post-31461","post","type-post","status-publish","format-standard","hentry","category-issue-comments","category-press-clippings"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/31461","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=31461"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/31461\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=31461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=31461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}