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CVTech isn't up for sale and dissident shareholder told to back off

MONTREAL – CVTech Group threatened Tuesday to take action against a dissident shareholder who has raised questions about a recent takeover offer for the company that was rebuffed.

The company told Guy Aubert, CVTech’s second largest shareholder, to stop interfering with the running of the company or face the consequences, though it did not say what they would be.

Aubert resigned as a board member in January and owns 14 per cent of the Quebec company, which provides a variety of services to the electric power industry.

“CVTech’s management considers that the repeated actions by Mr. Aubert are seriously hindering the board’s efforts of carrying out its principal mandate of maximizing the company’s value,” board member Luc Reny told shareholders at the company’s annual meeting.

In a public letter, Aubert has asked why a recent takeover offer was twice turned down. He said shareholders needed to be told why a second, higher offer of $1.95 per share by a leading NYSE-listed electrical contractor had been rebuffed by CVTech.

The company has called the letter “erroneous and incomplete.”

Reny said Aubert revealed confidential information he had access to as a board member and that the actions have hurt morale and put the company in a bad light with clients, suppliers and the financial community.

“This behaviour must stop and we’re evaluating what recourse is available to us on this matter,” he said to some applause.

Aubert said when a shareholder speaks out, it bothers a company’s board of directors. He said any action against him could be considered as a means to silence him.

“They can try to go after me to get me to be quiet,” he said after the meeting.

“But I have nothing to feel bad about. I have never said anything bad about any of the board’s directors.”

He said it’s clear that CVTech isn’t for sale now, but it’s not clear why takeover offers were refused.

Reny also noted that a proxy fight by Aubert last year interrupted a strategic review of the Drummondville, Que., company, and potential buyers cooled off.

He said there were three offers for CVTech, which weren’t considered high enough and the board decided that a growth strategy was the best path.

“The board is still of the opinion that the execution of CVTech’s business plan will bring more value in the medium term than a sale in the short term.”

After the shareholder meeting, CEO Andre Laramee said he can’t try to sell the company and make it grow at the same time.

“The board has never asked me to sell the company — never,” he said. “The goal is to grow. It always has been.”

Ahead of the annual meeting, CVTech said Monday that its subsidiaries have been awarded several new contracts in Ontario, Quebec and the Eastern United States, representing a total value of approximately $77.4 million.

Shares in CVTech closed down six cents, or 4.2 per cent, at $1.34 on the Toronto Stock Exchange.