Sanford faces tough choice in Canadian board battle

By PAULA OLIVER fishing writer

Local fishing giant Sanford is keeping a foot in both camps as the battle intensifies for control of a Canadian company in which it has a minority stake.

Sanford has a 14.8 per cent share in Newfoundland-based Fishery Products International, which catches, processes and markets fish in the United States, Canada, China and Europe.

The company hit the headlines last week when its chairman said he was aware of a shareholder attempt to oust the board of directors and sack its management.

The putsch was later confirmed by its leader, John Risley, the president of Clearwater Fine Foods, another Canadian seafood company.

Clearwater was involved in an unsuccessful, hostile takeover attempt of FPI in late 1999, and has built up a 13.4 per cent holding since. Mr Risley says he is dissatisfied with the "mediocre" returns FPI is achieving, and is working to put together an alternative slate of directors to that proposed by FPI.

All eyes have now turned to Sanford, because the size of its holding is crucial to either side achieving victory in a shareholder vote for the board of directors.

But Sanford managing director Eric Barratt is refusing to take sides yet - instead agreeing to put his name to both lists of directors.

"All I can confirm is that I am on the list of nominees put out in the FPI circular, and that I was asked and have agreed that my name could go on a list of nominees being prepared by Clearwater," Mr Barratt said yesterday. "But until I see both lists, I don't know whether I'm definitely on."

Mr Barratt's move was greeted with astonishment by FPI's present chairman, Victor Young, who called it absurd.

"It is unprecedented in Canadian corporate history that someone would sit on two opposing slates, when one slate's objective is to destroy the other," said Mr Young. "They are in a tough position, I agree. But that's what life's all about - making tough decisions."

Newfoundland legislation prevents a company holding any more than a 15 per cent stake in FPI, and four companies, including Sanford and Clearwater, hold stakes of at least 10 per cent.

Although the alternative board of directors being put together by Mr Risley has not yet been made public, he is said to enjoy the shareholder support of three of those companies. None has been given the chance to appear on FPI's list of nominated directors.

Mr Risley has pointed out that the board put forward by FPI carries a very small shareholder weighting, and that it should be up to shareholders to decide who runs the company, not its board of directors.

A local analyst who declined to be named said Mr Barratt was in a difficult position. Sanford was said to be keen to increase its stake in FPI, but if it failed to support the alternative board and then saw it take control, it could be left powerless.