The management of Sirius XM Canada Holdings Inc has put their feet down saying no to a complaint that has been made by some shareholders on matters privatization. In May this year Sirius XM Canada had reached an agreement to become private after acquisition by Sirius XM Holdings Inc. (NASDAQ:SIRI) is the biggest shareholder.
The complaint raised by some shareholders was done through Ontario Securities Commission. They are questioning the company’s recapitalization due to the privatization. In response to the questions being raised on the matter, the management said that the recapitalization was good for the company as it worked in its best interests. They also stated that they will present this position to the Commission very soon.
The privatization offer which was announced in May this year faced opposition from the onset where some of the shareholders felt that the price offered was too low. The other thing that has got shareholders up in arms about the deal is its governance whereby a share in cash or stock goes for $4.50. The management in turn stated that this proposal was a representation of 22.3% premium. The US counterpart already owns 32% of shares in Sirius XM Canada. Mark Redmond, the CEO and President of Sirius Canada believe that they will be more competitive even for the future with close alliances with the United States.
One of the shareholders who were against the idea of privatization, Benoît Durand stated that they were very disappointed about the entire deal stating this was going to undervalue the company by a big margin. There are those who have termed the deal as highly abusive and that it will only result in increasing the undervalue margins of the company.
The deal is seen through by a special committee which worked hand in hand with two fairness opinions namely National Bank Financial Inc and Ernst7Young LLP.
During this period there were no comments from Sirius XM U.S.
As for the CEO of Sirius XM Canada, there is a lot of tension in the air but still the mother company holds the sticks that matter. After all you don’t pay the board members for nothing. They are supposed to stand up to anything including abuse.