CALGARY -- Ontario Teachers Pension Plan said yesterday it will vote against Precision Drilling Corp.'s proposed energy trust conversion, but has no plans to challenge it in court.
Instead, the pension fund -- which manages $88-billion -- plans to use its "right of dissent," which means it can seek fair value for its stake by selling it back directly to Precision Drilling, a spokeswoman said.
"We've got to take a stand at one point," said Claude Lamoureux, chief executive officer of Teachers and a co-founder of the Canadian Coalition for Good Governance.
Teachers has been vocal this year on deals it finds questionable, including Molson Inc.'s merger with Adolph Coors Co. and the energy trust conversion of Penn West Petroleum Ltd.
Calgary-based Precision Drilling has remade itself this year, a process that officially started in February and led to the sale of two divisions accounting for about half the company.
The other half -- consisting of Canada's largest fleet of oil and gas drilling rigs -- is set to become an energy trust, a move for which there is a shareholders vote on Oct. 31.
"Teachers see the events from February onward as a multi-stepped single reorganization and as such believes that the reorganization should have been submitted to shareholders for approval in its entirety," Teachers said in an opinion on its website yesterday.
Teachers owns about 820,000 shares of Precision, which is about 0.6 per cent of the company's fully diluted float.
The founder of Precision Drilling said all the decisions were carefully and properly made.
"This has been done very carefully," Hank Swartout, Precision chairman, president and chief executive officer, said in an interview yesterday.
"Every T was crossed and every I was dotted, without question. It was a very slow, thorough process," Mr. Swartout said.
© The Globe and Mail
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