New Zealand Oil & Gas has received a notice from O.G. Oil & Gas (Singapore) Pte. Ltd. of its intention to make a partial takeover offer to acquire 67.55% of each class of the shares in New Zealand Oil & Gas it does not already hold or control, for NZ$0.77 per share.
If successful, the proposed offer would result in O.G. Oil & Gas holding or controlling up to 70 per cent, but in any case more than 50 per cent, of the voting rights in New Zealand Oil & Gas.
The target company’s independent response committee, which is the the same as the committee responding to the partial takeover offer from Zeta Energy Pte Limited, has said it is not in a position to comment further at this stage.
“The committee will meet as soon as possible to assess the O.G. Oil & Gas Takeover Notice in detail. The committee will also immediately proceed with the appointment of an independent adviser and fulfilment of its other obligations under the Code,” NZOG said.
Worth noting, the independent response committee recommends that New Zealand Oil & Gas shareholders take no action in relation to the O.G. Oil & Gas Takeover Notice until shareholders receive further guidance.
Also, the committee last week, aware of the potential O.G. Oil & Gas offer which was not formal but indicative at the time, advised shareholders to reject the earlier takeover proposal by Zeta, as the indicative offer from O.G. Oil & Gas it appeared superior to the offer from Zeta..
In its statement presenting a rationale behind the takeover offer O.G. Oil & Gas has said that its opinion of the NZOG situation was starkly different from the one from Zeta.
The Singapore based offeror said: “Zeta’s recent offer seeks to increase its stake to approximately 53%. Zeta’s view is that NZOG is “essentially a cashbox” that is at a “strategic cross road”.
“Zeta intends, amongst other things, to pursue the return of NZ$50,000,000 of capital to shareholders and to drive down what it characterises as excessive and duplicative overheads. We fear this means significant reductions to NZOG’s management team and future capabilities.”
“We see the situation differently. In our view, NZOG is in an enviable position, with the right leadership and sufficient capital to take advantage of this attractive point in the exploration and development cycle.”
The company said it felt it was the right time in the exploration and development cycle to invest in the oil and gas sector.
“After many years of lean investment, we feel there is a unique opportunity for companies that are willing and able to prudently deploy resources toward new exploration.”
“We are faced with two starkly divergent opinions on NZOG’s future. NZOG’s Independent Directors share our view that “the Zeta strategy is inferior to [NZOG’s] current strategy.” This has reinforced our conviction that the opportunities in front of NZOG, like the Clipper exploration permit, are simply too interesting to ignore. In the face of Zeta’s offer, we have concluded that the best way to preserve those opportunities and protect shareholder value is to make our own offer for control of NZOG.
“We have chosen not to make a full takeover offer because we believe it is important that NZOG maintains its public listing on the NZX Main Board. By remaining a public company, NZOG will be able to access new capital to fund future growth and will give existing shareholders (even those who accept our Offer) the opportunity to participate as the business develops.”
New Zealand Oil & Gas said it would release a statement on the latest offer, along with the independent adviser’s report within 14 days after O.G. Oil & Gas sends an offer document to shareholders.
Offshore Energy Today Staff