A fight for control at the top of Canada’s Thunderbird Entertainment Group has entered its latest phase.
Thunderbird’s management is under attack by a key shareholder, Texas-based hedge fund Voss Capital, which wants to replace the board with others who can “unlock the value” of the Kim’s Convenience and Highway Thru Hell maker.
A second shareholder, Railroad Ranch Capital, has also called for a “rigorous strategic review process” after claiming Thunderbird’s public valuation does not accurately reflect its success.
Thunderbird’s board has released a statement “correcting the record… regarding false statements” made by Voss, which owns 13.3% of the company, last week.
It claims Voss has initiated “an ambush proxy fight” by nominating an alternative board on the final day it’s permitted to do. Calling this a “calculated tactic,” the board said it had been forced to postpone its annual general meeting until Q1 2023. This was so it could assess the experience and track record of Voss’ nominations and give shareholders “all of the information necessary” to decide who would control the company going forward.
Thunderbird’s current board includes CEO Jennifer Twiner McCarron, interim Chair and former Lionsgate CFO Marni Wieshofer, Lionsgate founder Frank Giustra and Archie Comics Vice Chairman Jerome Levy. Voss wants to replace them with a team including former Hot Docs Co-President and CBC Chief Business Officer Heather Conway, Voss analyst Taylor Henderson and former Rogers Media exec Shannon Valliant.
Voss had claimed to have major shareholder Giustra’s backing but he has since strongly denied that is the case. He became a stakeholder ten years ago.
Voss says it is “disappointed” by Thunderbird’s strategic direction and the board’s “apparent lack of urgency to create value and unresponsiveness to shareholder concerns.” It claims to “believe in the work that Jen [McCarron] and the Thunderbird management are doing” but that “an unwillingness to fully explore strategic alternatives” was placing the company at “significant disadvantage to competitors.”
Vancouver-based Thunderbird countered that claim, saying its shares had “outperformed the market, the industry and its peers.” It pointed to statistics showing the company’s share price has grown 39% since it began trading in November 2018 up to the day before Voss released its statement. In the same period, it claimed Canadian rivals WildBrain, Boat Rocker Media and VerticalScope Holdings had all seen significant share price drops.
In reality, the current share price of C$3.35 ($2.51) is slightly above where it was four years ago and has both dipped well below and risen well above that level. It has been slipping in the past year, having reached over C$5 in early December 2021.
“Voss is mistaken in its assertion that it can unlock value for Thunderbird shareholders simply by putting up a ‘for sale’ sign,” Thunderbird said in its statement. “The prospect of a premium is limited not just by the current market environment but also by deal risk for non-Canadian bidders.”
Thunderbird claims Voss is attempting to take over the company without paying a premium, and claimed its nominees are “ill-equipped to run a qualified or thorough strategic review process” in comparison to its own team.