'All about the arena'

TERRY JONES -- Sun Media

, Last Updated: 10:18 AM ET

So what happened? What changed?

How did "Not For Sale" change to "About To Be Sold"?

How did this go from Daryl Katz being given the bum's rush by Cal Nichols and the Edmonton Investors Group to Nichols standing first in line to sell his shares to the Rexall owner?

In August, Nichols announced "a resounding vote to reject this offer."

Remember the quotes?

- "It's not about money, it's about doing the right thing for Edmonton."

- "Our group is best suited for Edmonton and the Oilers."

- "We will lead and invest in a new arena. Our group is best positioned to make it become a reality, not just for hockey but for Edmonton."

How does this go from "No way" to "OK"?

First of all, what we're dealing with this time isn't a hostile take over attempt against a group of the all-time greatest guys in Edmonton history.

There's every indication that Katz, if not invited back from within, was certainly encouraged by a few major shareholders to learn from some of his major mistakes the first time around and come at this from an entirely different direction.

And this time Katz wasn't a flim-flam man.

This wasn't an offer that said one thing but in reality was something else.

Nichols went from being almost hostile in turning down the hostile takeover attempt to being a strong supporter of Katz becoming owner.

This time Nichols wasn't spewing venom all over Katz, but choosing his words carefully so as not to upset the reclusive Rexall owner allegedly worth two billion dollars.

Back in August, Nichols called Katz's third offer of $185 million (up from $150- and $155-million) bogus beyond belief.

"It's reported at $185 million, but it is actually close to $136 million after capital adjustments and tax treatment to bring the number to a shares value.

"The number is further reduced by contingent and employees severance liabilities where we have no way of knowing what the cost would be. In reality, it's less than $125 million."

This time, Nichols politely explained, $188 million is $188 million.

A totally different offer?

"I would say so. That offer was for an asset. This is considerably different. It's to buy individual shares," he said, indicating it was completely clean with nobody getting stuck with severance liabilities, etc.

It's also about the Investors Group doing some due diligence and discovering that the Oilers were going to be required to put up more money for an arena than they put up to save the team in the first place.

"We discovered that the Oilers' contribution would be significant and that to raise the money would take out about half the shareholders," he said. "It would involve a cash call or taking on a lot more debt."

Personally, he realized he couldn't do it on a financial or energy level.

"I'm not a person with deep pockets. I wasn't a person who was going to chip in. It would be a steep hill to climb and I'm running out of gas," he said.

Another thing was the old "buy low, sell high" thing.

"I think there was some thought that he'd never go away and another thought that one day we'd be looking for an offer and maybe it's better to sell while we knew there was an offer there."

The realization was that this was more about a new arena than owning the Oilers.

"It's the best way for everybody to come together to get a new arena downtown and the growth around it."

Then Nichols said it: That, for Katz, this isn't really about owning the Oilers so much as it is the new arena downtown and being in position "A" for the investment around it.

"It's all about the arena downtown. He didn't want to go there unless he owned the arena."

Buy a hockey team for the fair price of $185 million but get a $450 million arena for $100 million? Steal of a deal.


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