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Edmonton Oilers ownership group rejects latest purchase offer

The Canadian Press
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The Hockey News
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Edmonton Oilers ownership group rejects latest purchase offer

The Canadian Press
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That was the message delivered Tuesday by Cal Nichols, chairman of the 33-member group that owns and operates the NHL franchise. The Edmonton Investors Group "resoundingly" rejected the latest bid from local pharmacy tycoon Daryl Katz to purchase the team for C$185 million.

"I hope that this, at least for the near term, puts an end to the offer thing because this has been a bit of a circus for four months and no one in our group was going to continue doing what we were doing," Nichols told reporters in a news conference at the city's tony Petroleum Club.

"We (also) had a motion and a vote and declared the Oilers are not for sale.

"This is not about dollars, this is about Edmonton. An ownership group is best suited for Edmonton and the Oilers. We'll keep the team competitive, spend to the (salary) cap when and if the opportunity of winning presents itself, and will lead and invest in a new arena."

Nichols declined to give details or a breakdown of the secret ballot.

"Clearly I'm disappointed that the ownership group has elected not to proceed with a sale, but I accept their decision and wish them well," Katz said in a news release. "As an Oilers fan and the franchise's largest corporate sponsor I will continue to be a major supporter of the team."

Nichols said the team needed to wrap up the affair and move on. He said he fears there will be "collateral damage," suggesting there had been dissension and hard feelings among the owners on whether to sell.

"We've spent a lot of time and resources over the past four months seeking expert financial and legal analysis and implications of a potential sale," he said.

"In a group this big there is going to be ongoing debate - we should, we shouldn't, maybe. Then that goes up a notch and it gets a little more emotional and people start doing and saying things that are not good for the spirit of our group and the relationship with the fan base in the community."

Referring to the offer, he said once capital adjustments and tax implications are factored in, the price falls to C$136 million. And he said other liabilities such as severance payments will eventually push it even lower than that.

Katz owns the multibillion-dollar pharmaceutical giant the Katz Group, which includes the Rexall Pharmacy chain of stores.

He has made three offers since the spring to buy the team and needs owners representing two-thirds of the 7,492 shares to get the deal passed.

Nichols said they had indicated to the Katz Group they were waiting for a "clean" offer of C$165 million before taking it to shareholders, but he said Tuesday the publicity and uncertainty forced them to move earlier.

Forbes Magazine lists the 45-year-old Katz as one of the 500 wealthiest people on the planet, with a net worth of US$1.6 billion. He owns a monster multimillion-dollar home in the city's river valley and the Rexall Pharmacy has naming rights to the Oilers home rink.

The issue has boiled in the Alberta capital all summer. Katz has promised to help bankroll a new rink downtown (estimated cost C$500 million), build a new training facility and spend the maximum amount on player salaries allowed under the league's salary cap.

The cap will be just over US$50 million this year and the Oilers are currently $5 million below it.

The Edmonton Investors Group had 38 members when it purchased the Oilers for C$100 million nine years ago, saving the team from moving to Houston.

Since then, the franchise has become a financial success story. Forbes values the club at US$146 million. The team has all but reached its maximum of 14,000 season tickets and this fall, the team's new WHL junior franchise, the Edmonton Oil Kings, begins play.

Club president Patrick LaForge said the uncertainty has not affected frontline operations.

"We haven't had a long list of messages from our customers saying 'I'm not going to renew' or 'I'm cancelling until you guys figure out the ownership world.' In fact the reverse is true. We're sold out of season tickets.

"This is an exciting market to be in. It's hockey crazy and this is the No. 1 entertainment vehicle in northern Canada."

The Oilers, Western Conference champs in 2005-06, are hoping to rebound from a non-playoff year by signing free agents like Sheldon Souray and Dustin Penner.

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Edmonton Oilers ownership group rejects latest purchase offer