Nasty business of dealing the gutter with trash Another Alberta company has also seen insider buying recently. Over the last three weeks, Smoothwater Capital has bought 1.57 million shares of Alberta Oilsands Inc. (AOS), unchanged at 12 cents on 811,000 shares. Smoothwater now holds 32.8 million of the company's 212 million shares. The buying activity comes amid a war of words between Smoothwater and Alberta Oilsands' board, which is trying to persuade investors to support a merger with Marquee Energy Ltd. (MQL: $0.20). The merger was announced on Aug. 19 and will involve 1.67 shares of Alberta Oilsands being issued for each share of Marquee. It is intended to combine Alberta Oilsands' cash with Marquee's assets. Smoothwater voiced instant disapproval of the merger, having long wanted the cash to be used for a special dividend instead, and was further outraged by the company's position that, because it is technically an acquirer, it does not need shareholder approval for the merger. "Smoothwater demands an Alberta Oilsands shareholder vote on [the] value-destroying bailout," railed Smoothwater on Aug. 21. The matter headed to the Alberta courts and the TSX Venture Exchange authorities for clarification. On Sept. 8, the exchange delivered a blow to Smoothwater by declaring shareholder approval unnecessary. This did not stop Smoothwater from buying 7,500 shares on Sept. 9. As for the court's opinion, a hearing is scheduled for tomorrow.
If everything goes Alberta Oilsands' way, the company expects to close the deal on Thursday, Sept. 22. That will be nearly two months before the next shareholder meeting on Nov. 15. Smoothwater has long said it wants to overhaul the board at the meeting. It sent a requisition notice on March 28, 2016, seeking to replace three existing directors with three of its own nominees, and then sent another notice on Aug. 22 that nominated five candidates. Because the two requisitions were different, Alberta Oilsands said on Aug. 26 that it "considers the [March 28] requisition to have been abandoned ... [and] will not be transacting the business set out in the requisition" on Nov. 15. It then said the new requisition did not comply with its advance-notice bylaws. This did not go over well with Smoothwater, which fumed at the "indefensible and desperate" decision, calling it an example of Alberta Oilsands' "long pattern of abusive and oppressive actions." It does not seem particularly worried about the meeting, however. Based on its belief that its filings were compliant, along with what it described last week as "the almost universal lack of shareholder confidence in the current board," it continues to believe that its nominees will be elected on Nov. 15.