Octavian Advisors LP, EnerCare Inc.’s biggest shareholder, is seeking more influence on the water-heater rental company’s board, saying management’s “strategic missteps” dragged the stock down.
Octavian is requesting a meeting to appoint four new directors, expanding the board to 10, according to a statement today from the New York-based investment firm. Octavian holds about 12 percent of Richmond Hill, Ontario-based EnerCare, whose shares have sunk about 40 percent since 2007.
EnerCare has spent almost two years rejecting the firm’s attempts to discuss the company’s strategy, Octavian Chief Executive Officer Richard Hurowitz said in the statement. EnerCare, whose sales topped C$200 million ($195 million) last year, adopted a shareholder rights plan almost eight months ago to block unsolicited takeover attempts.
“The board should be open to any and all value-maximizing positions, including a sale of the company,” Hurowitz said in a telephone interview.
Hurowitz also criticized EnerCare’s 2008 purchase of Stratacon Inc., saying the board failed to weigh the regulatory risks of the deal for the company, which provides services to help landlords monitor tenants’ energy use.
“EnerCare will carefully consider Octavian’s request with its advisers and provide a response to the market in due course,” the company said today in a statement.
EnerCare was known as the Consumers’ Waterheater Income Fund before converting from an income trust in January. Its shares rose 2.2 percent to C$9.01 today in Toronto trading, the highest level since January 2009.
Octavian also said today that it will attempt to replace the board at Balda AG, a German maker of plastic components. Balda said in a statement today that it will consider Octavian’s request.