Since I wrote my recent article stating that we should support Creo in fighting the attack from the dissident shareholders, things have moved on a lot. That is not to say I have changed my mind. I think for the ongoing needs of Creo’s customers that a change in management where the dissident shareholder’s nominees run the company, would not be in their best interests. This, however , shows that customers' interests really don’t count where the shareholders see an opportunity for better financial returns.

The situation now appears to be that the dissent shareholders are more likely to win the battle and take over the running of Creo. Recently the influential Fairvest Securities, the Canadian arm of Institutional Shareholder Services, Inc. has recommended Creo’s shareholders accept the dissidents’ approach. The dissidents, Goodwood Inc. and Burton Capital Management, who between them own nearly 6% of Creo’s shares, are forcing a shareholder vote on February 10, to replace the Creo Board with their own nominees. Since I wrote my article I have had a lot of comments, and been sent a number of documents from financial analysts. In most cases these appear to be recommending acceptance of the dissident’s approach. Comments from within the printing industry, and particularly Creo’s customers, however is strongly supporting Creo’s management.

It appears that the dissidents have created a position where it will be difficult for shareholders not to support them. Since the dissidents announced last year they were to raise a challenge to the Creo Board, the share price of the company has rocketed. At the time of the initial announcement the share price was a little under $9.00. On January 13, 2005 it was $16.15. This appears largely due to analysts changing the Creo shares to a buy rating on the basis of a speculative gain. A very large number of shares have been traded. The dissidents are suggesting that if they took control the share price would increase significantly. It now appears to have reached the situation that market feeling appears to suggest if Creo’s Board wins the vote on February 10 that the share price will plummet. How many shareholders will gamble on the possibility of losing all the recent gains they have made? It also appears that Creo’s senior management see the potential of losing. They have set up a financial payment plan that is implemented in the event of change, where members of the Board get a sizeable financial payout. Some senior Creo executives are also stated to have sold a large number of shares.