Rob Snyder, Co-Founder Of Stream, Discloses Acquisition of 5.2% Of Common Shares In Just Energy Group Inc.

September 13, 2019

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Reporting by Paul Ring • ring@energychoicematters.com

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Rob Snyder, through the entity "The Robert L. Snyder Trust – 2005 Stream" (hereafter collectively referred to as the "Reporting Persons"), disclosed that the Reporting Persons have acquired 5.2% (7,709,408 shares) of the common stock of Just Energy Group Inc., as reported in a Schedule 13D newly filed with the U.S. SEC

The co-founder of Stream Energy, Snyder served as its de facto CEO through 2012 and further had been its controlling equityholder since its inception. As previously reported in EnergyChoiceMatters.com, Stream Energy was acquired by NRG in July 2019 for a stated purchase price of $300 million.

According to public records, the entity through which Snyder has amassed his Just Energy position -- The Robert L. Snyder Trust - 2005 Stream -- is a Texas grantor trust established in 1997 by his parents with a $1 million bequest. The entity is reportedly the vehicle through which Snyder has managed his investments over the last 20 years, including interests in York International Corp., ShiftSmart, TakeStock Inventory, Intarcia Therapeutics and, most notably, Stream Energy.

A Schedule 13D, or a similar form noted below, known as a beneficial ownership report, is required to be filed when an individual acquires beneficial ownership of more than 5% of a voting class of a company’s equity securities registered under Section 12 of the Securities Exchange Act of 1934

In the required "Purpose of Transaction" part of Schedule 13D, the Reporting Persons stated, "The Reporting Persons originally acquired, and continue to hold, the Common Stock reported in this Schedule 13D for investment purposes. The Reporting Persons will continuously assess the Company’s business, financial condition, results of operations and prospects, general economic conditions, the securities markets in general and the Common Stock in particular, other developments, other investment opportunities, and its current strategies to enhance and maximize shareholder value. Depending on such assessments, the Reporting Persons may acquire additional Common Stock or may determine to sell or otherwise dispose of some or all of the Common Stock presently held the by Reporting Persons in the open market or in private transactions. Such actions will depend on a variety of factors, including, without limitation, current and anticipated future trading prices for the Common Stock, the financial condition, results of operations and prospects of the Company, alternative investment opportunities, general economic, financial market and industry conditions and other factors that the Reporting Persons may deem material to these investment decisions. The Reporting Persons reserve the right to change their intention with respect to any or all of the matters required to be disclosed in this Item 4."

The Reporting Persons further stated in the "Purpose of Transaction" part of Schedule 13D that, "Although the Reporting Persons had no plans or proposals at the time of the various purchases and do not have any particular plans or proposals at present, the Reporting Persons intend to review their investment in the Company on a continuing basis and may engage in communications with and/or express their views to and or/meet with management, the Company’s board of directors, one or more other shareholders, officers of the Company or third parties, including potential acquirers, service providers and financing sources, and/or formulate plans or proposals regarding the Company, its assets or its securities, and may take other steps seeking to bring about changes to increase shareholder value. Such proposals or positions may include one or more plans that relate to the Company’s business, management, capital structure and allocation, corporate governance, board composition and strategic alternatives and direction. During the course of such communications, the Reporting Persons may advocate or oppose one or more courses of action."

As previously reported by EnergyChoiceMatters.com, Just Energy is currently undergoing a strategic review, and plans to dispose of its businesses outside of North America. As previously reported, the company recently recorded an impairment from operational issues in customer enrolment and non-payment of accounts receivable in the Texas residential market, resulting in an aggregate adjustment of C$58.6 million, and collection issues in the U.K. market, resulting in an aggregate adjustment of C$74.1 million.

Notably, there are several schedules under which an individual must report acquisition of ownership in a public company of more than 5% of the outstanding stock. As noted, the Reporting Persons filed a Schedule 13D.

Individuals may also report 5% ownership under Schedule 13G. However, a filer under Schedule 13G must certify that the securities were acquired and are held, "in the ordinary course of business," and were not acquired and are not held, "for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect..."

In other words, Schedule 13G may only be filed by passive investors.

We stress that a filing of a Schedule 13D does not necessarily mean any investor would pursue activist practices, only that such activist practices may only occur if a Schedule 13D is filed.

A representative for Snyder said that he could not be reached for comment

Although not remembered by many in the retail energy industry, Snyder had a 20-year career in shareholder activism prior to co-founding Stream.

Snyder previously practiced mergers & acquisitions law within what was known as the Tender Offers Group at the Manhattan office of Fried, Frank, Harris, Shriver and Jacobson LLP. Snyder also spent a decade as Managing Director of family-controlled private equity firm SnyderCapital Corporation

Larry Mondry, former President and CEO of Stream and former CEO of CompUSA, gave some insights into Snyder's general approach to business from his time working with Snyder at Stream. Mondry was not familiar with Snyder's specific thinking concerning the 13D filing

"Rob is driven. When he sees an opportunity, he's going to go after it pretty hard, and he's going to win," Mondry said

"He's very bright, he analyzes things, he has a lot of depth to his analysis, and if he decides he's going to go after something, he's usually thought it out very well," Mondry said

Drawing an analogy to chess, Mondry said that Snyder, "is typically several moves ahead."

"He's figured that there's an opportunity here; my guess is he's right," Mondry said.

According to an insider source reached by EnergyChoiceMatters.com, Snyder's involvement with Just Energy is completely unrelated and separate from Snyder's work with Kynect (the new name for the former Stream direct selling business). The same source emphasized that Snyder remains fully engaged with the Kynect organization and is completely committed to expanding the success of that direct selling effort. The same insider source also confirmed that Snyder has no non-compete obligations in the aftermath of this summer's transaction with NRG.

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