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A proxy battle pitting the most recognizable (former) chief executive officer in Canada's oil patch against a recognizable (former) energy investment banker has fizzled – but the testy relationship remains.
FrontFour Capital Group LLC, an investment house, was going after Renegade Petroleum Ltd., a junior oil company. Zachary George co-founded FrontFour and had support from Suncor Energy Inc.'s former CEO Rick George – his dad. In the other corner, the outspoken Tom Budd, the former head of investment banking at GMP Securities Ltd.
FrontFour wanted board seats and called for a special meeting this week. Renegade was having none of it. But the brewing showdown, scheduled for this week, has been cancelled. FrontFour did not garner enough votes.
Statements by both sides after the votes were tallied, however, show the relationship is still cold.
Mr. Budd joined Renegade's board in April, 2013, and took over as chairman in October. FrontFour wasn't a fan of his leadership, questioning the independence of new board members.
A sample: "Mr. Donald Copeland serves on the board of Toscana [Energy Income Corp.] with Thomas Budd. Mr. Joseph Durante is an officer of Toscana and part of the management team that reports directly to Thomas Budd. How can anyone expect independence from a director whose performance and compensation is in part evaluated by Thomas Budd and Donald Copeland in another corporate context?," FrontFour asked in a statement last November. "One can only conclude that this was the result of desperation and a lack of viable director candidates given the track record of the current board."
Rick George owns Renegade shares and questioned the company's governance as well: "Good board governance is critically important," he told BNN in December. "As a shareholder of Renegade, I view the significant erosion of value over the last two years as a clear indication of the need for change."
But even Rick George's support was not enough to woo Renegade shareholders. FrontFour conceded defeat Sunday night.
The fund said it controls 30 per cent of Renegade's outstanding shares, but it noted that two other institutional investors voted in support of the company's management. "These two votes combined with weak overall vote submission make it mathematically impossible for minority shareholders to effect change at Renegade," FrontFour said in a statement.
FrontFour, however, said they still gained ground. "These concerned shareholders should take consolation in the fact that the company has made many changes since the September annual meeting, a clear acknowledgement of the company's poor governance standards and performance," its statement said.
Mr. Budd, in response, called the whole thing a waste. "Despite our numerous attempts to offer FrontFour two board seats in order to settle this wasteful diversion of money, time and resources, this proxy battle has unfortunately cost the Company in excess of $1-million," he said in a statement Monday. "Although this has delayed dealing with both the active interest generated from our strategic review, and the completion of our CEO search process, we are confident that the clarity achieved by ending this battle will allow us to proceed with the business at hand, as we look to enhance value for all shareholders."
The stock on the TSX Venture Exchange is down 56 per cent in the past year against the backdrop of an as-yet unresolved review of the company's strategic options and the proxy skirmish.