17,892 sub-shares represented.
Santa Monica Partners L. P. is filing this 13D not merely to strongly support electing Mr. Oliver at the Special Meeting as a trustee because we believe in him and his partners and what they stand for, but we also are doing so now because this is the only chance we may ever again have to elect a trustee as trustees serve until they resign or die. Of course to be clear we support Mr. Oliver because he supports converting the Trust into a Delaware corporation subject to modern governance principles such as:
(1) Annually electing directors which is permitted by the Trust’s Declaration of Trust, dated February 1, 1888
(2) Focusing on the establishment of an experienced team around the Trust’s new water business, with clearly defined goals and objectives, or otherwise considering the separation or sale of such business to a third party with a retained royalty
(3) And of course because of Mr. Oliver’s credentials including being a substantial shareholder and his willingness to put himself out and serve as a trustee of the Trust.
In addition we would think Mr. Oliver might work with the trustees to encourage them to take steps to bring out the value of the company such as:
(4) Encourage the trustees to move with dispatch to convert to “C” Corp. form and with a board of TPL Directors to be able to consider the other steps to bring out the value in the company. It is clear to us that although TPL has many investment attractions its present legal form has kept institutional investors such as ETFs, mutual funds, investment advisors and others from investing in the company. The mere change in business form from trust to corporation could remedy this situation. Is there any reason why trustees oppose institutional ownership or seeing TPL shares appreciate which might follow conversion to corporate form?
(5) Possibility of utilizing the increasing substantial cash flows which could for example well be turned into tax free payments to shareholders by considering a reorganization in which part of the company operations were turned into a passthrough e.g. REIT, entity paying out 90% or more of its income pretax.?
(6) The water business separation is not to be taken lightly. It could mean a spin-off of a business which had triple digit revenue and net profit growth and a high double digit net profit margin in 2018.
(7) Exxon is going to develop Permian basin wells four to five fold in
next 5 years. Other major oil companies have similar plans. A proactive TPL management would share information such as this with its owners and offer its own insights we believe as opposed to its deafening 100 year long silence.
FOR ALL OF THE ABOVE REASONS WE STRONGLY SUPPORT AND RECOMMEND A VOTE FOR THE ELECTION OF MR. OLIVER