Second Cup battle boils over

Michael Bregman, a big shareholder of takeover candidate Second Cup Ltd., says he wants the chairman and chief executive of Cara Operations Ltd. Removed from Second Cup’s board of directors. Bregman, a Second Cup director whose family owns 24 per cent of the company’s shares, said yesterday he does not think Second Cup’s board needs Cara chairman Bernard Syron or chief executive Gabe Tsampalieros because they don’t care about offering shareholders a fair price.

The Toronto Star
January 12, 2002

Second Cup battle boils over
Bregman wants to kick Cara boss off board
Reuters News Agency

Michael Bregman, a big shareholder of takeover candidate Second Cup Ltd., says he wants the chairman and chief executive of Cara Operations Ltd. Removed from Second Cup’s board of directors.

Bregman, a Second Cup director whose family owns 24 per cent of the company’s shares, said yesterday he does not think Second Cup’s board needs Cara chairman Bernard Syron or chief executive Gabe Tsampalieros because they don’t care about offering shareholders a fair price.

Cara, a food services firm that owns 39 per cent of the coffee-shop chain’s shares, has mad two hostile bids for Second Cup, the second one for all its shares at $7.50 a piece.

“I am highly confident that a reconstructed board of directors will deliver a substantially greater value than the $7.50 offered by Cara,” Bregman said.

Second Cup wants between $8.25 and $9.75 a share.

Bregman, Investors Group, which owns or controls 17.4 per cent of Second Cup’s shares, and Genoa Capital, with about 4 per cent, have said they won’t accept the offer.

The battle for Second Cup turned ugly in November, when it proposed a poison pill, or shareholder rights plan, to thwart Cara’s offer.

The plan would have allowed Second Cup to issue millions of new shares, making the takeover hugely expensive for Cara.

But Cara took the battle to the Ontario Securities Commission, which ordered Second Cup to kill the plan.

Second Cup shares closed unchanged yesterday at $8 on the Toronto Stock Exchange. They have traded between $5.80 and $8.20 in the last year.


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