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Rob Snyder Increases Holdings In Just Energy To 8.3% Of Common Shares

Has Held "Frank Exchange of Views" With Just Energy Board Members, Officers Concerning Strategic Review, Accounts Receivables Adjustment

September 27, 2019

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Copyright 2010-19
Reporting by Paul Ring •

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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 increased their holdings of Just Energy Group Inc. to 8.3% of Just Energy's common stock, according to an amended Schedule 13D/A newly filed with the U.S. Securities & Exchange Commission.

As exclusively reported by, the Reporting Persons had earlier this month disclosed ownership of 5.2% of the common stock of Just Energy Group Inc.

As previously reported, Just Energy is currently undergoing a strategic review, and plans to dispose of its businesses outside of North America. As also 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.

According to industry sources, over the last few months the Board of Directors of Just Energy has been evaluating possible alternatives for the company, including a possible sale, and has recently begun considering definite bids from four major known participants in the North American deregulated energy segment. While any final determination is said to be far from finalized, this evaluative process is continuing to move forward and has been further complicated by the emergence of an unexpected new proposal submitted to Just Energy’s financial advisors early this week, according to industry sources.

A spokesperson for Just Energy said that, "While we can’t comment on rumour and speculation, the Strategic Review process initiated in early June is ongoing and the Board is comfortable with the progress to date. We have not set a specific timeframe for the conclusion of the strategic review. We plan to provide an update when the Board has approved a specific course of action. While the process is ongoing, Just Energy is focused on improving and optimizing the business."

The Schedule 13D/A filed by the Reporting Persons also amends statements under the "Purpose of Transaction" section of the form.

Specifically, under Item 4 of the Schedule 13D/A entitled "Purpose of Transaction," the Reporting Persons now additionally state, "Since acquiring Common Stock the Reporting Persons have conducted discussions and a frank exchange of views with certain members of the Company’s board of directors and certain officers of the Company concerning the Company’s ongoing strategic review process announced on June 6, 2019 (the 'Strategic Review') and the Company’s recent adjustment to accounts receivable on July 23, 2019 and August 9, 2019 (the 'Accounts Receivable Adjustments')."

Insiders close to the discussions with Just Energy indicate that Snyder has expressed deep dissatisfaction with the oversight provided by Just Energy’s Board of Directors over the past several years and in particular with the leadership and transparency provided by Rebecca MacDonald, the principal founder and Executive Chairman of the Board of Just Energy Group Inc. MacDonald’s ownership position in Just Energy as of her last reportage during March 2019 was approximately 4% of its common shares.

"Snyder has been watching this company, once the jewel of the deregulated retailer market, slowly circle the drain for five years now," said an industry source close to this unfolding situation who did not wish to be identified. "Without any competitive constraints from the NRG transaction but having now a couple hundred million [dollars] of liquidity, it should not surprise anyone that Rob has set his sights upon fixing Just Energy. And I am certain that [Snyder] feels that Rebecca MacDonald is absolutely part of the problem rather than part of the solution," the source said.

Moreover, under Item 6 of the Schedule 13D/A entitled "Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer," the amended Schedule 13D/A now includes a new statement that, "The Reporting Persons have discussed with certain other significant shareholders of the Company a host of issues regarding the strategic direction and the management of the Company, including the Strategic Review and the Accounts Receivable Adjustments."

The Schedule 13D/A did not disclose the identity of any shareholders with which the Reporting Persons have had discussions.

According to public records, the largest shareholders of Just Energy Group Inc. include Canadian billionaire James Allen Pattison of Vancouver -- often called the "Warren Buffett of Canada" -- and the family of the late Ronald V. Joyce, the founder of the Tim Horton’s restaurant chain. Pattison holds approximately 18% of the company, and the Joyce family holds approximately 13%.

Snyder, one of the best known principals within the deregulated energy retailer sector, was the principal co-founder of Stream Energy and served as its de facto CEO through 2012. Snyder further had been Stream’s controlling equityholder since its inception. As previously reported, Stream Energy was acquired by NRG in July 2019 for a stated purchase price of $300 million.

A representative for Snyder once again said that he could not be reached for comment, but that "[Snyder’s] disclosures within today’s Schedule 13D/A speaks for itself."

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.

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