For the Love of Money
A new offer to buy Westland Development unfolds
The shareholders of Westland Development might be in for a surprise. You see, their company, which owns 57,000 acres of land immediately to the west of Albuquerque that used to be the 300-year-old Atrisco Land Grant, has been up for sale since last August. There was an offer from a Delaware-based company (ANM Holdings), for a tidy sum of $158 million at $200 a share, which the Westland board of directors decided to take. Then there was the better offer from Nevada-based company Sedora Holdings for $211 million at $266.23 a share, which the Westland board decided was good enough to warrant exiting their previous contract. Now, a new player has entered the ring—the California-based SunCal Companies. And the fight to the end has all the markings of a long, dirty brawl.
The story of Westland is not an easy one to tell. Suffice it to say that, before Westland can sell itself, it needs a two-thirds majority approval of its shareholders, of which there are about 6,000. Some of those shareholders have said they want to sell, as the company hasn’t yielded much profit for shareholders in years; others are ardently against it, saying the land the company owns is about more than money--it’s also about cultural heritage.
After months of debate and negotiations, a time had been set for the final decision. A shareholder meeting was scheduled for Thursday, June 8, at 9 a.m. at Hotel Albuquerque, where the fate of the company was to be voted on. Yet, a mere week before the vote was to take place, on May 30, SunCal swooped in, offering Westland $280 a share for a total of $222 million. Westland announced on June 1 that if Sedora didn’t match the new offer by Monday, June 5, they would terminate their agreement and sign a contract with the new company, which would also need to go to a vote before shareholders.
The offer comes at a time when new findings in the Westland saga were revealed; namely, that there may be up to 500 million barrels of oil underneath Westland. Additionally, according to court documents filed a couple weeks ago in a lawsuit against Westland aimed at stopping the sale, the company’s vice president for marketing, Brent Lesley, told the board of directors last August that the company is worth approximately $377 million.
SunCal’s offer recognizes the oil discovery and states that all oil and gas revenue from current leases, and 20 percent of all revenue from future leases, will go to shareholders or a “charitable trust.”
According to a Westland press release, the shareholder meeting will not be cancelled, but “Westland expects that the vote relating to the merger agreement will not occur.” At the meeting, shareholders will still vote in the election of three Westland directors.
At the time this story went to print, Sedora had not announced whether or not it would meet SunCal’s offer.