Euro-Nat rejection urged

Press, 24 July 1986, Page 28

Euro-Nat rejection urged

PA Wellington The boards of sister companies, New Zealand Oil and Gas, Ltd, and United Resources Investment Holdings, Ltd, have written to shareholders urging rejection of EuroNational Corporation, Ltd’s take-over . bids for both companies. NZOG directors said Euro-National had introduced some particularly onerous conditions into its proposal.

These conditions enabled Euro-National to return acceptances if it did not receive acceptances for 51 per cent of the total ordinary shares in NZOG, and 84 per cent of the options and hold acceptances without acting on them from July 23 to the last date at which the offer could be declared unconditional (November 30).

It could also withdraw

its bid if NZOG continued with its planned exploration programme and could return any NZOG shareholders’ acceptances if Euro-National failed to receive sufficient acceptances under its other take-over offer for United Resources.

“In your directors’ view these conditions place accepting NZOG shareholders in a position of distinct disadvantage,” NZOG said.

“Moreover, your company’s operations would be restricted in a manner incapable of being met in the normal course of business.”

With regard to the form of the price offer, NZOG said Euro-National would first take up acceptances from NZOG shareholders who elect to accept shares only in Euro-National.

If holders of more than 51 per cent of the NZOG

shares on issue and 84 per cent of the options on issue accepted the "scrip only” alternative of the offer, Euro-National would take up only a portion of those acceptances.

And if after taking up all acceptances for scrip only Euro-National had not achieved 51 per cent and 84 per cent, it reserved the right to top up to 51 per cent and 84 per cent by taking a portion of those acceptances which contained an election to take cash only. This “top-up” would take place on a pro-rata basis.

The acceptance procedure required, in the directors’ view, a totally unacceptable level of uncertainty for shareholders as no acceptances needed to be taken up by Euro-National.

NZOG said its largest shareholder. Oil Fields NL, with 39.6 per cent, had

advised that it-would reject the proposed offer.

In their letter, United Resources directors said conditions for Euro-National’s partial bid would involve accepting shareholders and optionholders in substantial delay and risk.

"If you accept the EuroNational offer, you must relinquish your voting powers, and your acceptance becomes irrevocable, but there is absolutely no guarantee that your acceptance will be taken up,” the directors said.

It could take until November 30 before Euro-National decided what to do with the company’s shares and options.

The offer was conditional on acceptances of 75.8 per cent of shares and 50 per cent of listed options. As the holders of in excess of 51 per cent of shares had said they would reject the bid, this condition could not be met.