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Fryeburg Water Company shareholders approached about selling stock options to Nestle
Published Date
CONWAY — While a proposed agreement between Nestle and the Fryeburg Water Company awaits state approval, part of another agreement involving the two companies has become public.The Fryeburg Water Company sent a letter to shareholders last November looking for people interested in selling stock purchase options to Nestle, according to paperwork received by the Maine Public Utilities Commission Office of the Consumer Advocate.
The long-term contract with Nestle Waters North America goes "hand in hand" with the stock purchase options, according to the letter, which was signed by Fryeburg Water Company president Hugh Hastings. "The first agreement needs the approval of the Maine PUC. Once NWNA (Nestle Waters North America) and FWC (Fryeburg Water Company) have agreed, the second agreement on a stock option need only NWNA and a majority of FWC stockholders to agree. [The Maine and New Hampshire PUC] would not be involved until such time that the option to buy is requested, which has been stated by NWNA clearly they do not see if every (sic) happening."
The two pages of one alleged stock purchase option agreement received by the consumer advocate's office puts the price of the FWC. stock at $10,000 a share, should Nestle ever decide to exercise its option to buy. The agreement says it is between Nestle and the Fryeburg Congregational Church, but the state only received two of the four pages of the document.
The state did receive, however, an anonymous note dated December 5, 2011, that alleges the church was coerced into signing the agreement. "Members of the executive council of the First Congregational Church of Fryeburg, Maine, are being forced to agree to sign the enclosed documents by the board of finance even though we voted not to agree to sign them," the note said.
A call to the church was not returned by press time.
It is unclear how many stockholders, if any, took advantage of the proposal. It is also unclear what the purpose of the agreement is. Officials from the Fryeburg Water Company declined to discuss it or were unavailable.
"I'm not prepared to talk about that now," Jean Andrews, vice president of the Fryeburg Water Company said before directing questions to Peter Hastings.
Peter Hastings did not return a call by press time. Hugh Hastings was not available for comment, according to Andrews.
Calls to several other directors listed on the Fryeburg Water Company annual report were also not returned by press time, except for George Weston, who directed questions about the agreement to Andrews.
"I don't know much about it," he said.
Weston could not recall if he, as a stockholder, had signed a stock purchase option agreement. "I may have," he said, "I don't remember."
He did, however, say the Fryeburg Water Company is doing well. "Everything is going fine," he said.
Mark Dubois, a spokesman for Poland Spring, Nestle's local affiliate, reiterated the section of Hugh Hastings' letter about Nestle's interest in owning FWC: "We have no intention of acquiring the Fryeburg Water Company," he said. "We have no business in delivering water to people's taps."
Dubois said the agreement before the Maine PUC was in no way tied to any other agreements for Nestle. He did not know any specifics of FWC stock option purchase agreements, he said, and Nestle has not signed anything. "We don't have any agreement at this time."
Nestle's attorney in Portland, Maine, did not return a call by press time.
The consumer advocate's office, meanwhile, has questions about what Hastings' letter said about not needing PUC approval to enter into a stock purchase agreement.
"Based on what we've seen in the only two pages of the stock purchase option that we have," Bill Black, an attorney for the public advocate's office, "and based on what we are hearing from Fryeburg, we think that if the water company and Nestle are going to sign this stock purchase option it should be submitted for approval."
