TORONTO, ONTARIO--(Marketwire - April 23, 2012) - EnerCare Inc. (TSX:ECI) ("EnerCare") today released a letter to all shareholders urging them to vote their BLUE proxies and reject Octavian's board-stacking scheme, so that EnerCare can continue a steady course of strategic acquisition, organic growth and regular monthly dividends for shareholders.
The letter summarizes EnerCare's position in its battle to prevent Octavian from disrupting the business and forcing a quick sale. In this challenge, EnerCare has recently received the endorsement of two leading independent proxy advisory firms, Institutional Shareholder Services and Glass Lewis & Co., both of which have recommended that shareholders vote for management's position.
Dear Fellow EnerCare Shareholder:
We're nearing the end of a battle with a New York-based hedge fund that wants to take control of your company for its own short-term gain.
I'm urging you to say 'no' to Octavian's scheme by voting your Blue Proxy.
Thanks to an experienced, qualified Board, EnerCare has followed a steady course of strategic acquisition and organic growth.
And, we've seen results.
In the last two years the return on your investment has grown appreciably. A $100 investment in EnerCare two years ago is worth about $228.86 today - an approximate 129% return.1
Unfortunately, Octavian wants to exploit our success for its own benefit. Its plans would turn long-term growth and dividends into a short-term quick profit for itself.
Octavian has been intent on disrupting the Board's long-term strategy and for cing a quick sale. We have said no.
- In May 2010, Octavian asked us to sell EnerCare at $6.00 per share. We said no.
- In November 2010, Octavian supported an offer by Macquarie to buy EnerCare at $6.45 per share. Again, we said no.
If we had yielded to Octavian's demands, shareholders would have been denied 72% in total returns ($3.46 in share price appreciation plus $0.87 in dividends).1
Two things are clear:
- The Board and management of EnerCare were correct to say no to Octavian's demands, and
- Octavian has no understanding of our business.
Beyond supporting a sale of the company at $6.45, Octavian has made a number of other moves that expose this lack of understanding as well as questionable judgment.
- Octavian said we should spin off the sub-metering business, even though that business positioned EnerCare to take advantage of a broader range of customers with diverse energy needs and realize synergies with our rentals business. With the acquisition of Enbridge Electric Connections Inc. (now EnerCare Connections Inc.) in October 2010, we became the largest non-utility provider of sub-metering services in Canada.
- Octavian proposed a self-serving, one-time dividend that would immediately enrich themselves, but would load EnerCare with debt and undermine years of prudent financial management and hard work, jeopardizing future growth and regular monthly dividends.
Octavian first approached EnerCare over two years ago. At first we welcomed its interest. We wanted to work construc tively with them - to hear their ideas and concerns. We repeatedly asked them to provide us with detailed proposals for our consideration - none were ever received.
We met with Octavian in early November 2011 and offered them the opportunity to propose nominees for consideration to fill a seat on the Board. Yet, they rejected that offer and refused to participate in this process.
It soon became apparent what Octavian was trying to do.
In late 2011, it made its first attempt to stack our Board, demanding that we install four of their own hand-picked nominees on the Board. Now Octavian is seeking to get its way through a proxy battle.
You will be asked to consider Octavian's demands at the annual and special meeting of shareholders on April 30. Octavian wants you to help them stack the board by increasing the size of the Board, dismissing two experienced independent directors and electing four hand-picked Octavian nominees. It wants 40% of the board seats, even though it owns only 13% of EnerCare's shares.
In recent days, we've received support from a highly-respected third party. Leading proxy advisory services firm Institutional Shareholder Services (ISS) has recommended that you vote FOR management's director nominees and AGAINST Octavian's resolution.
I encourage you to follow that advice. Send a clear message to Octavian by voting your BLUE proxy before the April 26 deadline. If you need assistance voting your BLUE proxy, please call Kingsdale Shareholder Services toll-free at 1-888-518-6813 or call collect at 416-867-2272.
Our goals remain simple. Continue to:
- Grow the business.
- Deliver strong financial results.
- Pay regular, reliable dividends.
Thank you for your support as we continue on this path.
1 Calculated as of March 23, 2012, and assumes dividend reinvestment on a non-taxable basis at each monthly payment date.
The Board of Directors and management of EnerCare encourage shareholders to vote their Blue proxies in support of management's nominees to protect shareholders' regular monthly dividends.
PROTECT YOUR DIVIDEND - VOTE YOUR BLUE PROXY TODAY
Shareholders should call Kingsdale Shareholder Services toll-free at 1-888-518-6813 or call collect at 416-867-2272 for assistance in voting the BLUE proxy.
For more information, please go to: www.ProtectEnerCare.com.
About EnerCare Inc.
EnerCare owns a portfolio of approximately 1.2 million installed water heaters and other assets, rented primarily to residential customers in Ontario. EnerCare also owns EnerCare Connections Inc., a leading sub-metering company, with metering contracts for condominium and apartment suites in Ontario, Alberta and elsewhere in Canada.
For more information about the upcoming April 30 annual and special meeting of shareholders, please visit www.protectenercare.com. You can also find more information about EnerCare on SEDAR at www.sedar.com, on our investor website at www.enercareinc.com or on our rentals and sub-metering business website at www.enercare.ca.
This news release contains certain forward-looking statements that involve various risks and uncertainties. The forward-lookin g information in this news release includes statements that reflect management's expectation regarding EnerCare's growth, results of operations, performance, business prospects and opportunities. Such forward-looking information reflects management's current beliefs and is based on information available to them and/or assumptions management believes are reasonable. Many factors could cause results to differ materially from the results discussed in the forward-looking information. Although the forward-looking information is based on what management believes to be reasonable assumptions, EnerCare cannot assure investors that actual results will be consistent with this forward-looking information. All forward-looking information in this news release is made as of the date hereof. Except as required by applicable securities laws, EnerCare does not intend and does not assume any obligations to update or revise the forward-looking information, whether as a result of new information, future events or otherwise. A thorough discussion in respect of the material risks relating to the business and structure of EnerCare can be found in its current Annual Information Form, which is available on SEDAR at www.sedar.com.