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Preferred shareholders, but in name only

The invitation to the holders of Capstone rate-reset preferred shares must have been lost in the mail.

Judging by some recent actions, it would appear that preferred shareholders are preferred in name only.

The latest example is set to play in early March when holders of securities from Capstone Infrastructure Corp. gather to vote on the takeover from British-based ICON Infrastructure Partners C a transaction worth $480 million. (Specifically, Irving Infrastructure Corp., one of ICON, is making the acquisition.)

All owners have been invited to the vote: Capstone’s common shareholders and holders of their Class B exchangeable units happen to be inspired to turn up, as have holders of two lots of convertible debentures. Those investors come with an incentive to attend and vote: All been offered either a premium to the stock’s recent trading price or perhaps a payment that reflects the modification of control.

But the invitation towards the holders of rate-reset preferred shares must have been lost within the mail. Or, to be accurate, it had been never sent. “Quarterly dividends are expected to be declared to preferred shareholders on the continuing basis and those shares will continue to be listed and trade around the Toronto Stock Exchange following closing from the Arrangement,” said the release announcing ICON’s planned acquisition that came a few months after Capstone hired two firms to help management and also the board to experience a strategic review.

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