Bid for mineral firms

Press, 8 July 1986, Page 31

Bid for mineral firms

PA Wellington Euro-National Corporation, Ltd, has made an offer for 51 per cent of New Zealand Oil and Gas, Ltd, and 75.8 per cent of United Resources, Ltd. Euro-National said yesterday that both the offers were conditional on each other and on Commerce Commission approval. A special condition was that United Resources did not execute or sell its options for shares in NZOG. Euro-National offered either 45c for each NZOG share, or one EuroNational share for every 12 NZOG. It would also pay 12c for each option in NZOG, or would allocate one Euro-National share for 40 NZOG options, to aquire 84 per cent of the N2OG options. i United Resources

shareholders would be offered 45c a share or one Euro-National share for 12 United Resources shares.

To aquire 50 per cent of United Resources options, Euro-National would pay 12c a share or one share for every 30 options. Euro-National shares closed at 690 c on Friday, while NZOG and United Resources were 35c and 28c respectively.

If the bids were successful, United Resources would be owned 75 per cent by Euro-National and 25 per cent by NZOG which would, in turn, be owned 51 per cent by Euro-National and the balance by the public. Other assets the EuroNational group of companies would then have include a 50 per cent holding in Oil Fields Liability, and a 20 per

cent holding in Mineral Resources (NZ), Ltd, which, in turn, owns 27 per cent of the Martha Hill mine in Waihi. Euro-National would also have a 10.9 per cent holding in Otter Exploration NL, an Australian mining company, plus funds presently held by the various companies, and several inland oil licences held by either NZOG or Oil Fields. A holding in a mineral resources group would give Euro-National a key position in resource development, with the chance to benefit from any oil field development, and to share in the redevelopment of the Martha Hill mine, a potential $6OO million resource. In the statement, EuroNational said NZOG was founded on the plan that capital funds would be

invested in interest-bear-ing deposits to pay for exploration.

But the cost of oil exploration, particularly offshore, had increased so much that the cost of two offshore wells equalled the entire capital of the NZOG group. A change of plan would lead to potentially better and earlier returns for shareholders who invested in these resource companies, particularly in areas such as:

• Redirection of capital into different areas such as those pursued by Euro-National in order to generate returns so dividends could be paid and more funds invested in exploration. • Rationalisation of oil exploration areas held by NZOG and Oil Fields so that the most promising areas were kept, and

with levels of interest consistent with various companies’ ability to pay for them.

• Acquisition of interests in organisations which had operating mines or oil wells. Euro-National said it produced above average returns and believed the NZOG group of companies would have a better profit performance and share value growth under its stewardship. Offer documents would be posted to shareholders of NZOG and United Resources on July 23. The offer closes on August 23. A handling fee of 5c a share would be paid to brokers on all acceptances bearing brokers stamps as a contribution towards administration costs for handling the large number of qpareholders involved.