Irwin Michael of ABC Funds says that Coast Capital isn’t paying enough for rival credit union, Surrey Metro Savings.

Michael notes that three years ago Canada Trust offered to pay $24 to privatize Surrey Metro. Now Coast Capital is only offering $21. “The CT deal valued Surrey at 1.7 times book value. This new deal only values it at book. Surrey shareholders, in consequence, are not being compensated for the excellent company progress over the past three years. In fact, at $21, the Coast Capital bid is $3 lower than what Canada Trust had offered to pay over three years ago.”

The ABC Funds controls 575,000 shares or 11.8% of the 4,872,165 Surrey Metro shares outstanding. “At this point we are actively supporting and encouraging other interested suitors to come forth,” he says. “We believe Surrey Metro Savings Credit Union is very undervalued. It is under-followed by investment analysts. Surrey’s capable management team led by Lloyd Craig, President, has done a terrific job of turning Surrey Metro into a top performing financial institution, controlling over $2.7 billion of assets.”

“Surrey Metro is the only public credit union in Canada and, quite frankly, it should not be public since there is no value added to the company due to its public listing. In consequence, we strongly support all efforts to privatize Surrey Metro.”