THE CANADIAN PRESS
EDMONTON — A split has appeared within the Edmonton Oilers’ owners group as they prepare to decide whether to sell the NHL team to billionaire pharmacy tycoon Daryl Katz, keep the existing community ownership arrangement or look for new investors.
Last month, Cal Nichols resigned as chairman of the investors group while offering a strong endorsement of the latest offer from Katz, who was born and raised in Edmonton and owns the Rexall Pharmacy chain.
But Bill Butler, the new chairman of the investors group, held a news conference Wednesday to say they’ve been advised by lawyers not to accept Katz’s offer of $188 million.
"(Lawyers) recommended that in no way, shape or form should anyone sign the agreement in its current form," said Butler, who later conceded he prefers community ownership of the team.
A one-page news release from the 33-member investors group outlines several concerns and poses a handful of questions for Katz. The first issue is whether he’s prepared to guarantee that the Oilers will remain in Edmonton permanently.
"Whatever decisions we make should honour the spirit and commitment to Edmonton which first brought us together as shareholders," says the release.
"Clearly, the reason we got together was to keep the team in town," Butler later told reporters.
Katz responded late Wednesday with a fiery one-page statement denouncing Butler’s comments and questioning whether the owners were acting in the best interests of the team.
"The board’s conduct in recent days is confusing and I fail to see how it serves the best interests of (Oilers) shareholders," said Katz.
"I intend to respond to whatever valid questions the board has about my offer for the team, but I think they owe an equal duty to come clean about any involvement members of the board may have in fashioning an alternative bid, how much debt they plan to assume to retain ownership, and what commitments they are prepared to make to help secure a new arena."
Katz has made several bids to buy the Oilers, but has been rebuffed every time. This time he’s offering to buy 100 per cent of the 7,492 outstanding shares, but will settle for two-thirds of the shares which under Alberta law would give him a controlling interest in the team.
But the Oilers board is looking at other several options besides the Katz offer, including a plan to buy out shareholders who want to sell, said Butler.
"One of our mandates is clearly to say, `Can we create an avenue of exit for unhappy … people that want out?’ " he said.
"We have no debt. Could we then find ways and means of raising capital using the leverage of the company to buy out exiting shareholders?"
Butler said some current investors might be prepared to take a larger piece of the team, while there are also indications that other Edmonton business people may be willing to invest in the community-owned team.
.Wednesday’s news conference was billed as update on the status of Katz’s purchase offer. But the board chairman also used the event to distance the board from the position taken by Nichols.
"My personal opinion is that Cal got tired," said Butler. "We think once we make all of our various alternatives known, perhaps his position may modify and may not. But he is one shareholder. He is one person."
"Is it a public relations dilemma? Yes."
Nichols, described by Butler as "the voice of the Oilers over the last 10 years," did not return phone calls Wednesday. But after stating last August that "the Edmonton Oilers are not for sale," Nichols reversed his position at a news conference in mid-December.
"I think the price is very good and it allows me to achieve liquidity and make changes in my life," said Nichols. "We’ve all gotten older, we’ve had a couple of deaths in the group and things do change."
Butler disagrees. He said there has been no "train wreck" in terms of the Oilers business, so there’s no reason to be rushing to sell the team.
"We’ve sold out 100 games straight, the dollars is at par, our debt is virtually zero. The future of this team is absolutely bedrock. So what’s different?"
Some of the older shareholders are also looking to get out of the ownership group, said Butler, who is not ruling out the possibility of eventually endorsing Katz’s offer if they can clarify several issues.
But he said they need to find out more details on a proposal to build a new arena in downtown Edmonton, including what Katz expects in return for a reported $100 million investment in a building project that would likely cost at least $500 million.
"I have no reason to doubt that (Katz) has the ability to write cheques," said Butler.
"I go head-to-head every day with large developers that are 10 times the value of (my company) and we win. And we win because it isn’t just about writing cheques, it’s about understanding income streams and optimizing value."
The investors group has scheduled an information meeting for Jan. 21 when the board will make its final recommendation on the purchase offer. Butler expects the board members will then vote on Katz’s offer, which expires Jan. 31.
