Blazers valued at $7.1 million

From The Daily News of Saturday, Aug. 11, 2007:
By GREGG DRINNAN
Daily News Sports Editor
Mike Priestner has attempted to trump River City Hockey Inc.
The Daily News has learned that Priestner, who owns the Edmonton-based Mike Priestner Automotive Group, has presented the Kamloops Blazers Sports Society with an offer to purchase that places a value of $7.110 million on the WHL franchise.
The offer was made to the society’s board of directors late Friday night.
That is easily the highest value ever placed on a WHL franchise. On June 26, 2006, the WHL sold an expansion franchise — the Edmonton Oil Kings — to the Edmonton Investors Group, which also controls the NHL’s Edmonton Oilers, for $4 million. That is believed to be the highest price paid for a WHL franchise to date. The Oil Kings will begin play this season.
A week ago, Priestner, in what was a preliminary proposal, offered to buy 55 per cent of the team for $3.3 million, leaving 45 per cent with shareholders, something that placed a $6-million value on the franchise.
The offer presented last night would give him 51 per cent for $3,626,100. That would leave the shareholders holding 49 per cent, valued at $3,483,900.
RCH made an offer of $6,100,176 on July 18. RCH is led by Vancouver businessman Tom Gaglardi, who heads up Northland Properties. RCH also includes ex-Blazers players Shane Doan, Jarome Iginla, Mark Recchi and Darryl Sydor.
Gaglardi and Priestner will be in town Monday and will meet with the society’s board of directors. “It will be an information session,” society president Murray Owen said.
The society’s nine-person board operates the Blazers on behalf of more than 250 shareholders. While Owen and various directors have spoken with Gaglardi and Priestner, the board has never officially met with either party.
Both offers guarantee that under new ownership the Blazers would never leave Kamloops. While RCH’s offer would have it take control of the franchise, Priestner’s would allow the organization to maintain the status quo, leaving the board and shareholders in place.
“The Blazers,” Priestner wrote to the board, “are a storied franchise that we would be thrilled to be affiliated with. Creating a partnership now between ourselves and the society will secure the future of the franchise and ward off any unwanted threats of a hostile takeover . . .”
Priestner’s offer suggests that with the society putting the $3,626,100 it would receive from him into the Kamloops Blazers Sports Foundation, it would yield “a minimum annual return of $181,305 if invested at five per cent.”
Priestner also is prepared “to offer a $326,000 guaranteed return to the (society) for the first 10 years as their return on investment.”
“This,” Priestner’s offer reads, “ensures the board a minimum of $500,000 per annum to distribute to the benefit of the Kamloops and area community, which would immediately make the Blazers the leading contributor to the betterment of Kamloops society.”
Priestner also provided a comparison sheet that looks at both offers. According to the comparison, Priestner’s bid has a value of $7,110,000, while the RCH bid is at $5,297,000.
Under Priestner’s bid, the society doesn’t assume any liabilities. Under the RCH bid, the society, according to Priestner’s calculations, will be liable for such items as accounts payable, the team’s education fund, two outstanding debentures, paying shareholders with interest, and severance pay.
Priestner’s offer would have the nine-member board retained, with it reporting directly to Priestner. The shareholders would elect the board, with the board electing a president for a three-year term. All of the board’s committees would be retained.
Dean Clark, the general manager and head coach, along with his coaching, training, medical, scouting and front-office staff all would be left in place.
Asked about Priestner having gotten involved, Owen replied: “It certainly creates an option.”