SEATTLE, WA / ACCESSWIRE / September 21, 2022 / Charles Frischer Letter to Special Committee
Atlas Corporation
23 Berkeley Square
London, United Kingdom W1J-6HE
Attn: Atlas Special Committee
Re: Poseidon Acquisition Corp Go Private Proposal
Dear Special Committee:
My name is Charles Frischer and my family owns common shares and call options in Atlas Corporation that give us an economic interest in more than 1,460,000 shares, an increase of 110,000 shares since my initial letter to your committee on August 15, 2022.
It has now been more than 48 days since the buyout group led by David Sokol made their proposal to take the company private for $14.45 per share. In the initial proposal from Poseidon, they thought a deal could be reached in 2-3 weeks and we are now entering our 7th week since August 4. Given that we have no agreement to date, I would hate to believe that either the buyout group or the special committee has decided not to negotiate in good faith. In a letter to the special committee on September 9, 2022 (see attached at the bottom of this press release), I expressed my belief that based upon the value of the business and discussions with shareholders, there is a strong desire and willingness to get a transaction done at a price of $16.50 per share.
I think it is entirely unreasonable for the buyout group not to raise their offer. It would be equally negligent for the special committee to expect an unreasonable price for the company as well. Some investors have asked me who does the special committee work for when it seems that $16.50 is a price that is both easily justifiable and acceptable to a majority of the minority of shareholders. If we were to learn that the special committee did not negotiate in good faith, for whatever reason, this would be a complete dereliction of their fiduciary duty to the minority shareholders. The special committee works on behalf of the minority shareholders and should not exist to insure that they maintain their board positions. I believe that minority shareholders want a fair deal, clearly above the $14.45 initial offer, and they will accept $16.50. Negotiating for more than $16.50 may not be in the interest of minority shareholders, especially if it risks not getting this deal completed.
In the most recent Atlas Corporation annual report filing in March of 2022, the company reported that the entire Board of Directors, outside of Mr. Sokol and Mr. Chen, owned a total of only 1,545,000 shares. It is not acceptable for owners of no more than a few hundred thousand shares to control the 90 million shares owned by minority shareholders. I believe the special committee must, if available, bring a deal at $16.50 and then let the majority of the minority decide via a direct shareholder vote.
My advice to the buyout group is to raise your bid to $16.50 to complete this acquisition. If the special committee is not willing to recommend that price to the minority shareholders, move ahead immediately with a tender offer at $16.50. This tender can have a requirement that you get enough shares to then do a short form merger once you control 90% of the shares. This would still be a fair and reasonable transaction in the spirit of Fairfax Financial's respect for minority shareholders. In the event that the special committee is not interested in negotiating fairly, do not let the potential desire of three small Atlas shareholders on the Board stop a fair transaction from happening.
Sincerely,
Charles Frischer
Charles Frischer
3156 East Laurelhurst Drive, NE
Seattle, WA 98105
September 9, 2022
Atlas Corporation
23 Berkeley Square
London, United Kingdom W1J-6HE
Attn: Atlas Special Committee
Re: Poseidon Acquisition Corp Go Private Proposal
Dear Special Committee:
My name is Charles Frischer and my family owns common shares and call options in Atlas Corporation that give us an economic interest in more than 1,460,000 shares, 110,000 more shares than since my first letter to your committee on August 15, 2022.
Since publishing my letter, I have spoken to a large number of Atlas shareholders, ranging from folks that own just a few thousand shares to the very largest. I believe I have spoken to most of the largest shareholders, with the exception of Capital Research. The owners of more than 1 million shares of Atlas Corporation are very smart, experienced and knowledgeable about this investment. Their message to me has been almost uniform - We want a deal, but we believe that the $14.45 offer is too low and the buyout group is being opportunistic.
Some large shareholders are upset with the one sided nature of the buyout proposal. They feel that if the large owners want to buy the company, the company should be marketed for sale and the highest bidder should win. Clearly, the buyout group is only a buyer and not a seller. Their opposition to marketing the company for other bids upsets this group of shareholders.
It is clear that if the company put itself up for sale, the price would be higher than the $14.45 offered by the buyout group. That said, we have to recognize the world that exists and that reality is that there is a fair price that will get a deal done between the majority of the minority and the buyout group. Let's keep in mind, all of the large shareholders that I have spoken to want a deal, but they want more than $14.45.
In the interest of full transparency, this is what I have learned. Based upon all of the discussions I have had with the large shareholders, the buyout amount that will obtain a majority of the minority shareholders is $16.50. I believe the minority shareholders are entitled to vote on a take private transaction. I am concerned that a special committee could try to push too hard on price and end up killing any deal, which is not what shareholders desire.
I have also spoken to a number of people who know Wiley Griffiths and they believe he is a very capable and smart investment banker.
I could have given you a much longer email with valuation calculations and EBITDA projections. I am sure Morgan Stanley is doing a great job providing that data. My insights are based upon speaking to shareholders representing tens of millions of shares of Atlas. Based upon what I have learned, there are at least 40 million yes votes for $16.50. $16.50 is the minimum deal that minority shareholders want and are willing to approve. They don't want the special committee to be super heroes and kill an acceptable outcome in the search for perfection.
I also think that if a deal was struck at $16.50 prior to declaration of the next 12.5 cent dividend payment, shareholders would be willing to concede that last payment to reach a compromise.
I am always available to speak and have told Will in investor relations that I am interested in speaking to the special committee to help bring color to the thoughts and concerns of the minority shareholders.
Sincerely,
Charles Frischer
Contact: Charles Frischer
[email protected]
917-528-1465
SOURCE: Charles Frischer