Is CUE's 2nd largest Shareholder the key to realizing its true value?

CUE, and O&G companies in general, have produced strong full year results. CUE has positive cashflow and a number of exploration and development opportunities. It also has financial support from its controlling entity NZOG.

Against this backdrop CUE's shares have fallen in value. A reason given for this is that CUEs future position is uncertain. Many feel that NZOG/OG are likely to attempt a full takeover for CUE.

If the takeover is launched while the share price is depressed the premium will be similarly depressed. This sentiment in turn further depresses the SP and so on....

Not a great outcome.

However IMO a takeover of CUE would provide SH with a much better outcome due to the overall SH composition.

CUE's shareholding consists of

NZOG 50.4%
BNP Paribas Noms Pty Ltd 17.01%
Remaining Top twenty 9.97%
Minority SH 22.62%

If NZOG seek to takeover CUE this could be achieved under either

An on market takeover bid (in the same form as NZOG bid for CUE in 2015) or,
A Scheme of arrangement (in a similar form to OG's offer for NZO in 2019 (NZX))

While there are a number of differences in these methods a key difference is that while compulsory acquisition through an on market bid is triggered at 90% of shareholders a scheme of arrangement requires only 75% of shares and 50% of shareholders to agree.

Based on this shareholding an on market bid would fail without BNP Paribas Noms Pty Ltd support and a scheme of arrangement would be difficult without them. (without BNP it would require over 75% of other shareholders to agree)

So fair to say that NZOG clearly have control, however BNP Paribas Noms have a blocking position. Without them NZOG will struggle to succeed in a full takeover.

The beneficiary of BNP Paribas Nom. Pty Ltd is PetroChina Company Ltd. (Based on last reference to PetroChina, CUE CEO Presentation October 2020 and no notice of change in substantial holding since then)

PetroChina have a current market capitalization of $116 billion and are ranked the 21st largest company in the world. (Forbes 2000, 2022)

PetroChina continue to see value in CUE and have increased their SH by approximately 2 million shares in the last FY.

PetroChina, through their wholly owned subsidiary Singapore Petroleum Company, have a 40% interest in Sampang PSC. (CUE holds a 15% interest)

PetroChina has been a SH in CUE since it purchased Singapore Petroleum Company in 2009.

PetroChina chose not to take up the NZOG on market offer in 2015.

IMO PetroChina have a clear understanding of the fair value of CUE and are in a position where they would be able to convey that understanding to NZOG in the case of a proposed takeover. I believe this ultimately would be of benefit to all remaining SH.

@Sharetrader78 and @invertedva, thankyou for all the information and analysis you have shared previously on CUE. You have both motivated me to keep researching CUE. I personally find it quite amazing that a small cap like CUE could have two companies like NZOG/OG and PetroChina on their register and hope that it will benefit all minorities moving forward.