Impartiality of Clublink Officer Votes in Doubt – Company Loans Millions to Insiders for Share Purchases

With the recent Clublink takeover proposal by Tri-White Coporation, the Canadian Shareholder Advisory Group would like to inform shareholders of a conflict of interest between insider shareholders and regular common shareholders.

Under the stewardship of CEO Rai Sahi, Clublink has loaned it’s executive officers over $4 million so that they could purchase almost 500 000 Clublink shares. These shares are presently being held as collateral by Clublink and will be voting to accept the takeover proposal.

This represents a clear conflict of interest as the independence of the officer shareholder voting is in doubt. Since the officers are employed by Clublink, and have purchased shares with money borrowed from Clublink, how can the public expect that these shares will be voted independently? Management has stressed that they want the takeover deal to proceed, so it is likely that all of the insider shareholders will use their “borrowed” shares to vote along company lines.

These types of insider loans serve the purpose of consolidating power within the upper ranks of the organization and help to ensure that voting results are skewed towards managements wishes. It is our recommendation that shares purchased by Clublink officers with money borrowed from Clublink and being held by Clublink as collateral be excluded from the takeover vote.

The following is a list of current company executive officers who have borrowed money from Clublink in order to purchase shares.

Robert Visentin is currently loaned $1 155 866 from Clublink to purchase 136 300 shares.
Charles F. Lorimer is currently loaned $923 248 to purchase 107 900 shares.
Edge M. Caravaggio is currently loaned $606 044 to purchase 70 000 shares.
Scott A. Davidson is currently loaned $572 850 to purchase 68 800 shares.
Meil Osborne is currently loaned $485 575 to purchase 56 300 shares.

Shareholders interested in getting more information can view the website http://www.ClublinkTakeover.wordpress.com or contact Mario Rizzi directly at 514 967 9827

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Canadian Shareholder Advisory Group Recommends Rejection of Clublink Takeover Proposal

We are reiterating our call for investors to reject the proposed Clublink takeover by Tri-White corporation, as the current offer is unfair to minority shareholders.

The current takeover proposal values Clublink shares at only $7.15. This is well below their book value of $9.70 per share and a huge discount to our estimated $14 per share liquidation value.

A simple glance at Clublink’s 2009 Annual Report, on page 47 reveals that management estimates the value of Clublink’s adjusted equity to be $209 million, or approximately $12.25 per share.

Shareholders who accept this proposal are forfeiting an aggregate value of over $100 million. This shareholder value will be transferred to Tri-White shareholders, namely Tri-White’s largest shareholder and CEO of both companies, Mr. Rai Sahi.

Shareholder voting ballots have recently been sent to all registered and beneficial Clublink shareholders. We recommend that shareholders promptly vote to reject the Amalgamation Agreement (Item C). A rejection of the takeover proposal may result in an increased purchase offer which will more closely reflect the value of Clublink shares and result in a financial benefit to shareholders.

Shareholders interested in getting more information can contact Mario Rizzi directly at 514 967 9827

Why all shareholders should reject the current Clublink takeover proposal

The merger severely undervalues to shares of Clublink.

–  The price is a 30% discount to Clublink book value.

–  The price is 50% below estimated liquidation value.

– Tri-White bought over 6 million Clublink shares in 2007 at $13.25 per share, now they want to buy the remainder at only $7.15 .

Rai Sahi, the CEO of both Clublink and Tri-White, is using his controlling stake in the companies to exploit shareholders.

–  In the Clublink takeover, Rai Sahi is attempting to drain millions of dollars from average shareholders for his own personal gain.

– By lending millions of dollars to Clublink company directors and executives for the purpose of buying Clublink shares, Rai Sahi has taken a de facto stronghold over the Clublink Board of Directors to the great detriment of the average shareholders.

The true value of Clublink shares

As I have stated before, Clublink shares have a book value (assets minus liability) of at least $9.70. On the day that the merger agreement was announced, the shares were trading at $7.47 on the TSX. Over the last 5 years, shares have traded in the $8 to $13 range and the high in 2008 was $9.95. The lowest price that the shares have traded at was $4.50, and they traded at this price only once, during a market wide panic selloff.

Tri-White corporation has been steadily accumulating shares since 2001. On June 1, 2007 Tri-White aquired 6,635,300 of Clublink for a price of $88 million. This is an average purchase price of $13.25 per share.

Now, after having acquired a total of 72.6% of Clublink shares, Tri-White is attempting to take over the remain shares of Clublink at a discount price of only $7.16 per share.

This represents a huge discount to the actual value of the Clublink shares. The CEO of Tri-White is Rai Sahi, who also happens to be the CEO of Clublink. He is trying to consolidate his ownership in the two companies by taking over the remainder of Clublink at a bargain basement price.

Rai Sahi must be stopped and we must VOTE AGAINST the Clublink takeover.

Possible illegal trading on day before takeover announcement

Shares of Clublink have not traded above $7.00 since November 19, 2008. Over the last 3 months, shares have traded in the $5.00 to $6.00 range.

Mysteriously, on May 28, 2009, the day before the merger was announced, in the final 20 minutes of trading on the TSX shares of Clublink spiked by over 19%. The shares went from $6.30 to $7.47, in less than 20 minutes before the close.

Somebody, using National Bank as the broker, purchased $35 000 in stock (5000 shares) with a market order, driving the price up by 19%.

This is a very fishy trade and I have reported it ot the Ontario Securities Commission. Somebody clearly knew about the takeover deal ahead of time and decided to trade on the news.

I urge you to contact the Ontario Securities Commission as well and to voice your opinion. https://www.osc.gov.on.ca/Contact/ct_cat-form.jsp

Clublink repurchases almost 400k shares before merger is announced

Rai Sahi is the CEO and largest shareholder of both Clublink and Tri-White. He has been overseeing large repurchases of company stock by both companies through normal course issuer bids over the last years. Through these repurchases he has been able to increase his ownership interest in both companies. (You can check out the inside purchase reports for the companies here – Tri-White 17 page insider buying report and Clublink 20 page insider buying report)

Now, Rai Sahi has decided to simply use his huge ownership stake in the companies to take over Clublink as cheaply as possible, thereby shortchanging the average investor by millions of dollars. The current deal values Clublink at a $40 million discount to book value and almost $100 million discount to estimated liquidation value.


Rai Sahi, the CEO of Clublink and Tri-White is litterally robbing the average shareholders in Clublink of millions of dollars and he must be  stopped. We must vote against this takeover or demand that the price be increased dramatically to reflect the true value of Clublink shares.

Tri-White’s offer to purchase Clublink seriously undervalues the company

Clublink Corporation is Canada’s largest owner and operator of golf clubs. It has excellent profits, cash flow and revenue growth and a book value of $9.70 per share. It operates 30 golf clubs accross Canada, 39 Championship 18 hole courses and 4 resorts. Annual revenue is $169 million, it is solidly profitable, with a huge average cashflow from opperations of $25 to $30 million per year. Book value per share is $9.70 and estimations of the liquidation value of the company are close to $14 per share.

Tri-White Corporation has entered into an agreement to purchase the whole Clublink Corporation for only$ 7.16 per share based on the closing price of Tri-White shares on the TSX of $6.51.


This price is far below the book value of Clublink and it is even below the trading value of Clublink stock on the day of the announcement of $7.47 per share.

You must vote against this merger. It values the company at below market value