Fording delays conversion vote

Faced with a revised takeover bid by the Sherritt Coal Partnership II, Calgary-based coal miner Fording (FDG-T) has decided to postpone its Dec. 20 shareholders’ meeting until Jan. 3.

Fording’s board of directors intends to review the new offer once it receives the Partnership’s information circular, and will thereafter issue guidance to its shareholders.

Fording’s chairman, Richard Haskayne, said in a press release, “We will examine the changes in the offer to evaluate whether it, in fact, offers any greater value to shareholders and how it compares to the value provided by the company’s enhanced plan of arrangement, involving Teck and Westshore.”

The Sherritt Partnership, an alliance of Sherritt International (S-T) and the powerful Ontario Teachers’ Pension Plan, recently revised their original all-cash $29-per-share bid for all of Fording’s shares to $35 per share, to a maximum of $850 million, plus new trust units.

The deal came after a Dec. 4 plan involving Fording, Teck Cominco (TEK-T), and Westshore Terminals Income Fund (WTE.U-T), which offers Fording shareholders $34 or one new income trust unit (or a combination of each) for each Fording share tendered.

Both plans call for combining coal assets into an income trust.

If all of Fording’s shareholders elect to take cash for their shares under the Sherritt Partnership’s offer, each will be limited to $17.63 plus 0.496 of an exchange right (good for one trust unit) for each of their shares. Under the Fording-Teck plan, the all-cash limit is $15.60 plus 0.541 of a unit per share. Both offers also include an estimated cash distribution of about $1.05 per unit during the first quarter of 2003, and “synergies” in the neighbourhood of $50 million.

The new Sherritt offer runs through Jan. 6.

Sherritt’s shares were 6 higher at $4.15 in late afternoon trade in Toronto on Dec. 13. Fording shares were trading at $33.28, 8 higher than their previous close. For their part, Westshore’s units were off 9 at $4.71.