Stuart Olson responds to letter from Crescendo Partners and Jamarant Capital

CALGARY, Jan. 13, 2019 /CNW/ – Stuart Olson Inc. (TSX:SOX, SOX.DB.A)) (“Stuart Olson” or the “Company”) today issued the following response to the public release of a January 11, 2019 letter from Crescendo Partners L.P. (“Crescendo”) and Jamarant Capital L.P. (“Jamarant”) (“the affiliated shareholders”) in which the two affiliated firms disclosed their intention to nominate one or more directors at the Company’s 2019 Annual General Meeting. 

Stuart Olson welcomes open communications with shareholders and values constructive input toward the shared goal of enhancing value. The Company has had ongoing dialogue with these shareholders for the past few months.  Despite the Company’s best efforts to come to a mutually agreeable outcome for all shareholders, Jamarant and Crescendo have announced their intention to launch a costly and distracting proxy fight. This is not constructive and does not serve the best interests of the Company or its shareholders.

Important Background to the Affiliated Shareholders’ Proxy Fight Threat

In their letter, the affiliated shareholders refer to several conversations with representatives of the Board over the past couple of months. It is important for shareholders to have the context of those discussions.

In November 2018, the affiliated shareholders requested the Company appoint Gregory Monahan, Managing Member of Jamarant, to its Board of Directors.

As the Board representatives have explained to the affiliated shareholders on multiple occasions, the challenge with considering Mr. Monahan for a Board seat is that Crescendo and Jamarant are formally affiliated with each other and Crescendo’s Managing Member, Eric Rosenfeld, is a member of the Board of Directors of Aecon Group Inc., which is a direct competitor to Stuart Olson. Mr. Monahan and Mr. Rosenfeld are long-time business partners, and Crescendo and Jamarant share ownership, office space and co-investments.

The Company informed Jamarant and Crescendo that Mr. Monahan could not be considered for nomination unless and until this conflict of interest was resolved to the Board’s satisfaction. In an effort to be constructive, and despite the fact that the affiliated shareholders consistently refused to disclose their ownership stake in the Company, the Board representatives suggested the potential appointment of a new independent director that was mutually acceptable to the Board and these shareholders. Crescendo and Jamarant refused to consider the suggestion.

Focused on Evaluating All Opportunities to Enhance Shareholder Value

The Board also rejected the affiliated shareholders’ call to immediately initiate a public process to sell the Company. The Stuart Olson Board and management team are committed to acting in the best interests of all shareholders, and regularly review the Company’s strategic priorities to enhance value.

“If there was ever an opportunity to strengthen the business and maximize shareholder value, we would certainly pursue it with vigor,” said Albrecht Bellstedt, Chairman of the Board. “At present, we believe the best course of action for the Company, its customers and all of its shareholders is to stay focused on our current projects and the more than $200 billion of opportunities that the affiliated shareholders rightly note are ahead of us. We are focused on delivering long-term, sustainable value to our shareholders.”

Stuart Olson’s current strategies have resulted in the delivery of a consistent dividend paid for 31 consecutive quarters representing $96.1 million returned to shareholders. The Company continues to win new contracts, and has a backlog of $1.6 billion across a diverse mix of public, private and industrial projects from Ontario to British Columbia. Also, the recent accretive acquisition of Tartan Canada Corporation expands the Company’s Industrial Group’s access to a larger share of the industrial market both in terms of mechanical and general contracting opportunities.

Stuart Olson is focused on building value for shareholders, operating safely and delivering outstanding service and quality to our customers.

About Stuart Olson Inc.

Stuart Olson Inc. provides general contracting and electrical building systems contracting in the public and private construction markets as well as general contracting, electrical, mechanical and specialty trades, such as insulation, cladding and asbestos abatement, in the industrial construction and services market. The Company operates office locations and projects throughout Western Canada, Ontario and the territories. Stuart Olson was recognized as one of Alberta’s Top 70 Employers in 2018 for the second consecutive year. Stuart Olson’s common shares and convertible debentures are listed on the Toronto Stock Exchange under the symbols “SOX” and “SOX.DB.A”, respectively. www.stuartolson.com

Forward Looking Information

This press release contains certain statements that may constitute forward-looking information within the meaning of applicable securities laws. Often, but not always, forward-looking information can be identified by the use of such words as “may”, “will”, “expect”, “believe”, “plan”, “intend”, “estimate”, “outlook”, “forecast”, “should”, “anticipate”, “seek”, “continue”, “see”, “project”, “predict”, “propose”, “targeting”, “potential”, “could”, “might” and other similar terminology, including statements concerning possible or assumed future results. Forward-looking information is based on management’s reasonable assumptions, analysis and estimates in respect of its experience and perception of trends, current economic conditions, government policies and expected developments, as well as other material factors that it considers to be relevant at the time of making such statements.

The forward-looking information in this press release includes statements with respect to its business strategy, potential future projects and business opportunities, and  is included solely for the purpose of assisting investors in understanding the Company’s financial position and the results of its operations as at the date hereof. By its nature, forward-looking information involves known and unknown risks and uncertainties, which give rise to the possibility that management’s assumptions, analysis and estimates will be incorrect and that the Company’s anticipated results will not be achieved. Although the Company believes that the statements with respect to forward-looking information are reasonable and current, such statements should not be interpreted as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. Forward-looking information is necessarily subject to a number of factors that may cause actual results to differ materially from those results implied by the expectations suggested by such information. Those factors include, without limitation, the risks and uncertainties described in the Company’s Annual Information Form filed with the securities regulatory authorities in Canada under the Company’s profile at www.sedar.com. Readers are encouraged to consider the foregoing risks and other factors carefully when evaluating the forward-looking information and are cautioned not to place undue reliance upon such information when making investment decisions.

The forward-looking information in this press release is current to the date hereof, and is subject to change following such date. While the Company may elect to do so, unless required by applicable law, it undertakes no obligation to update this information to reflect new information or circumstances at any particular time.

SOURCE Stuart Olson Inc.

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