CALGARY – An activist investor is seeking changes on the board of Crescent Point Energy Corp., but the company says it lacks credibility and is engaged in an ill-conceived and self-serving exercise.
Cation Capital Inc., which holds a 0.3 per cent stake in Calgary-based Crescent Point, said Monday it plans to nominate four people for election to the company’s board, which has 10 members.
“We believe Crescent Point’s assets have tremendous long-term potential and the ability to create significant value for all shareholders,” Cation president Sandy Edmonstone said in a statement.
“However, the current board seems incapable of implementing a cohesive strategy to create value and has instead allowed irresponsible decisions such as over-spending its 2017 budget, increasing leverage, undertaking a significant unexpected equity financing, delaying dividend cuts and continuing excessive executive pay.”
In addition to Edmonstone, Cation plans to nominate Dallas Howe, Herbert Pinder and Thomas Budd as potential directors.
Crescent Point said Cation seems intent on disrupting the company’s recent progress and urged shareholders to support the board nominees the company has put forth.
“Cation’s public statements about Crescent Point are erroneous, based on a flawed analysis and demonstrate their limited understanding of the business and strategic plan already underway,” Crescent Point said in a statement.
“Its interests are also inconsistent with those of the vast majority of our shareholders.”
Shares of Crescent Point, whose stock was up 2.5 per cent to $9.40 in Monday afternoon trading, have been hammered in recent years and are worth less than a quarter of what they traded for in 2014.
However, the company said it has the right board in place to achieve the objectives set out in its five-year plan in the face of this challenging, volatile market.
In a brief note to clients Monday, National Bank analyst Travis Wood said the introduction of new directors would not provide a significant upside for the company relative to its current five-year plan.
“We do not view the collective group as a necessary step in adding longer-term value to Crescent Point’s shareholders,” Wood said of the proposed Cation nominees.
Wood rated Crescent Point shares an “outperform” with a $16 price target.
Crescent Point is the largest oil producer in Saskatchewan and has fast-growing oil operations in Utah.
It recently announced it spent about $112 million to build its position as one of the largest landholders in the little know light oil shale East Shale Duvernay play. It said it added property through a series of transactions over the past year after entering the play by buying Legacy Oil + Gas Inc. in 2015.
The company’s annual meeting is set for May 4.
Companies in this story: (TSX:CPG)