Despite resentment at the bonuses paid to its managers, the Caisse de depot etplacement du Québec (CDPQ) eventually voted to sell Boucherville-based Uni-Select to its American competitor LKQ Corporation of Chicago.
The acquisition of the Quebec flagship received the support of 98.87% of shareholders – including the Caisse de dépôt – at a special meeting on April 27. As a reminder, LKQ’s unsolicited offer was $2.8 billion, or $48 per share.
The Caisse is convinced
At least two-thirds (66%) of the votes cast were in favor of the transaction for approval. The Caisse de Depot alone held almost 10% (exactly 9.75%) of the company’s shares.
Despite its weight, the fund was unable to prevent the sale. In a statement published on its website, the CDPQ confirms – after “analyzing the facts and representations received” – that it has finally decided to vote in favor of the proposed agreement between Uni-Select and LKQ.
“In this regard, we have asked LKQ Corporation to make us commitments to Quebec and confirm their firm intention to maintain and expand Uni-Select’s operations in Quebec, which has been done as requested,” the Caisse said on its website.
However, the nature of these commitments remains unclear. Kate Monfette, spokeswoman for the Caisse, mentions, among other things, the promise to “retain a CEO at headquarters in Boucherville”, the assurance that “qualified Canadian/Quebec employees” will be considered “for open positions” in the LKQ senior management and the Pursuing “Community Obligations” [d’Uni-Sélect].
- Listen to the business column with Sylvain Larocque, business journalist at the Journal de Montréal and the Journal de Québec, about the Caisse de dépot etplacement du Québec on the microphone of Richard Martineau QUB radio :
Controversial Awards
In addition, the Caisse has made no secret of its concerns about the tens of millions in bonuses that will be paid to the Quebec company’s officers (executives and directors) as part of the forthcoming change of control. The Caisse writes that these bonuses “are not consistent with best remuneration practices”.
Uni-Select CEO Brian McManus will benefit from a windfall of around $31 million after completing the sale to LKQ.
In March, La Presse announced that the transaction would bring executives and board members nearly $82 million in various bonuses and stock repurchases. Brian McManus alone, who was hired two years ago as Uni-Select’s executive chairman and chief executive officer, is expected to receive approximately $31.3 million in share repurchases, various bonuses related to the closing of the transaction, and severance payments.
Likewise, Uni-Select CFO Antony Pagano will receive $20.6 million in compensation, stock buybacks and various bonuses. For their part, the board members are to participate in share buybacks in the amount of approximately 9.8 million US dollars.
Founded in 1968, Uni-Select employs 5,200 people and reported 2022 sales of $1.7 billion.
UNI SELECT COMING SOON
- Foundation: 1968
- Revenue in 2022: $1.7 billion
- Employees: 5200
LKQ COMING SOON
- Foundation: 1998
- Revenue in 2022: $12.8 billion
- Employees: 51,000
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