About six weeks back at a conference on activist investing held in Toronto, Zac George, a portfolio manager at Connecticut-based FrontFour Capital, told the assembled guests that activism in the oil patch was set to increase. George noted that industry consolidation will be a “natural extension,” and that activity would arise because “there are more companies than management talent to run them.”
It didn’t take long for George’s prediction to play out. In fact he made it happen himself, though his first foray as an activist since that speech was outside the oil patch. Last week FrontFour and Zelman Capital sent a note to Intertape Polymer Group Inc. that urged the target to find ways to improve shareholder value. One possible way would be via a sale.
Thursday FrontFour moved its attention to the oil patch: after accumulating an 18.63% stake in Rock Energy Inc. it sent a note to the company requisitioning a shareholder’s meeting. It wants that meeting to be called to take control of the board, specifically to have three of its nominees replace three of the current directors.