MONTREAL -- After a period of relative calm, the battle over the fate of Vector Aerospace Corp., a thriving aircraft maintenance and repair business, has broken wide open again. But this time, some investors are hoping the simmering conflict will end in long-lasting peace.
Halifax entrepreneur Kenneth Rowe, whose privately held IMP Group International Inc. holds the largest stake in Vector at 37.3 per cent, is once again at the centre of events.
Halifax-based IMP, which is in some of the same businesses as Toronto-based Vector, says it intends to make a bid to boost its holding to 53 per cent. IMP hasn't given a price but said it would not be lower than $6.52, Vector's closing price last Friday.
Vector, a significant global player that is diversified in the both the military and commercial spheres, has fired back, saying a special committee of the board finds the hostile offer is not in the best interests of the company and is exploring alternatives.
IMP's move has triggered speculation that a bidding war may result.
Bob Tattersall, who runs a fund at Howson Tattersall Investment Counsel Ltd. that has a stake in Vector, is rooting for a final dénouement that would be a win for all shareholders.
"What would be nice would be a clean takeover offer for the whole company, a testosterone-fuelled battle like the ones we see in the U.S.," he said.
Mr. Rowe, one of the major movers and shakers in Atlantic Canada's business community, was involved in a previous fight at Vector involving another well-known East Coast player, Craig Dobbin.
Vector was spun off from Mr. Dobbin's CHC Helicopter Corp. in 1998. His son Mark became chief executive officer of Vector, but he and two other senior executives were ousted in 2003 by dissident shareholders led by Mr. Rowe.
The Dobbin clan - Craig Dobbin has since died - was seen several years ago as a player in a possible bidding war for Vector, but they appear to be on the sidelines for now.
For Vector president and CEO Declan O'Shea, this latest episode is just part of the legacy he inherited when he took over last year.
"It's always been with us. The fact that it's out in the public doesn't change anything [for management]," he said in an interview yesterday.
Mr. Rowe, who did not respond to an interview request yesterday, is keeping his cards close. It's not clear whether he is really after control of Vector or simply wants to boost the value of his existing stake by sparking a bidding war.
Vector is a very attractive, and undervalued, target, CIBC World Markets Inc. analyst Chris Murray said in a recent note.
Cameron Doerksen, an analyst with Versant Partners, views the IMP bid as disruptive and negative for shareholders.
The offer is a distraction to senior management at a time when it should be focused on the acquisition and growth opportunities out there and it will decrease liquidity for the remaining shareholders if it goes through, he wrote in a recent research note.
There is also the fact that IMP and Vector compete against each other in certain businesses and having IMP as the controlling shareholder "could result in conflicts of interest potentially to the detriment of Vector shareholders," he said.
Mr. O'Shea says he and his team don't feel in any way put off balance by the latest turbulence at Vector and remain focused on growth opportunities.
Mr. Rowe "has said he is very happy with what the company has been doing," Mr. O'Shea said.
"We're just running the business and sometimes you have events like this one come up."
VECTOR AEROSPACE (RNO)
Close: $6.35, down 55 cents
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