The community-based investors group that owns the Edmonton Oilers is ready to reject a fourth bid by billionaire Daryl Katz to buy the NHL team.

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Bill Butler, the new chairman of the Edmonton Investors Group that owns the Oilers, said lawyers recommend rejecting the offer. ((CBC))

The Edmonton Investors Group said Wednesday it will recommend that its shareholders turn down the $188-million offer made by Katz's Rexall Sports Corp. in December.

"In no way, shape or form should anyone sign the agreement in its current form," said Bill Butler, the EIG's new chairman, quoting the advice of lawyers.

The EIG, a consortium of 34 local businessmen, sent Katz a list of questions on New Year's Eve about the bid:

  • Whether Katz will commit to keeping the Oilers in Edmonton.
  • What conditions might apply if Katz is prepared to spend $100 million on a new arena, including who would run it and where in Edmonton it would be built.
  • Clarifications on the purchase price offered to shareholders.
  • Verification of the payment structure and financial qualification of Rexall Sports Corp.

Butler, who replaced Cal Nichols as board chairman last month, said it's important for the group to know if the team will remain in the city.

"That was what brought us together as shareholders in 1998 and that continues to hold us together as shareholders today," he said.

Butler also said the EIG is considering other options, including buying out shareholders who want to sell.

An information meeting of EIG shareholders is scheduled for Jan. 21.

Katz issued a statement late Wednesday, questioning whether the owners were acting in the best interests of the team.

"The board's conduct in recent days is confusing," said Katz.

"I intend to respond to whatever valid questions the board has about my offer for the team, but I think they owe an equal duty to come clean about any involvement members of the board may have in fashioning an alternative bid, how much debt they plan to assume to retain ownership, and what commitments they are prepared to make to help secure a new arena."

Katz's last offer, in August 2007, reportedly for more than $170 million US, was turned down. Previous offers of $145 million and $150 million were also rejected.