article from the west

Article from The West. Looks like Coopers nose out of joint, and also the TPA may yet lodge their bid.


Jilted suitor Cooper hits at Texan’s play

1st December 2008, 8:45 WST

Jilted suitor Cooper Energy has turned up the heat on Incremental Petroleum’s proposed white knight bidder, Malone Mitchell, notifying the corporate regulator of its concerns that the Texan oil millionaire may be in breach of takeover policy.

Cooper is understood to have written a strongly worded letter to Mr Mitchell’s Perth-based lawyers and also sent a copy to the Australian Securities & Investments Commission, in which it claims the investor may be in breach of Australia’s “truth in takeovers” rules because he has not launched his promised bid for Incremental.

The sudden emergence of Mr Mitchell’s TransAtlantic Corp five weeks ago, laden with an indicative $1.05-a-share cash offer for Incremental, all but sank Cooper’s own cash-and-scrip offer for the Perth oil and gas producer.

Mr Mitchell also acquired an 11.3 per cent stake in Incremental, his Turkey joint venture partner, in onmarket purchases.

But TransAtlantic’s bidder’s statement, which was slated for release last week, failed to materialise, sparking speculation Mr Mitchell never had any intention of following through on his offer talk but simply wanted to help Incremental stave off Cooper’s advances. Cooper was forced to close its unconditional offer, holding only a 27 per cent stake in Incremental.

Cooper’s lawyers at Minter Ellison are understood to have written to Mr Mitchell’s representatives, Cochrane Lishman, late last week, citing the lack of a TransAtlantic bidder’s statement as unacceptable and claiming Incremental shares were left to trade in an uninformed market.

Incremental closed at $1 on Friday, having avoided the wider sharemarket carnage and outperforming Cooper’s share price because of TransAtlantic’s purported bid interest.

Mr Mitchell’s lawyers have rejected Cooper’s allegations, claiming the millionaire had merely issued a “statement of expectation” rather than a binding promise to release its bidder’s statement by last week. They said TransAtlantic’s statement would be lodged soon.

Cooper launched its hostile Incremental bid in early September. At the time worth $104 million, the seethrough value of the offer quickly fell from $1.32 per Incremental share to as low as 76¢ in line with Cooper’s ailing share price, which suffered amid the market turmoil.

Incremental rejected Cooper’s bid using independent expert KPMG, which declared the target was worth between $2.41 and $3.05 a share.

But, conscious of the deteriorating global markets, Incremental then put itself up for sale on the day that Cooper declared its takeover bid unconditional.

WestBusiness has obtained a copy of a sales pitch prepared by Incremental chief executive Gerry McGann, in which he blamed Cooper’s bid and the global markets meltdown for his board’s decision “to sell the company as an operating entity”.

It is unclear whether the invitation gained much traction among potential buyers, with names including Strike Oil and Beach Petroleum mentioned.

Mr McGann’s invitation was compiled on October 24, just hours after Cooper declared its Incremental bid unconditional and final.

TransAtlantic announced its intention to make a cash offer for Incremental three days later.

PETER KLINGER