Not sure if this has been posted - from AFR...
- May 12 2017 at 4:56 PM
- Updated May 12 2017 at 4:56 PM
Macquarie Group has been accused of unfairly taking advantage of Central Petroleum shareholders by a group of investors aiming to gather enough momentum to block
the financial giant's $87 million takeover offer.
Shareholders who say they own between 5 per cent and 6 per cent of the junior gas player are arguing Macquarie's 20¢ a share base offer, due to go to a vote on June 5, undervalues Central given the bank's own expectations of rising east coast gas prices and Central's ability to benefit from
the tight market.
Nor does it take into account Central's helium resources, new gas sales to Northern Territory customers and the opportunity that would be opened up by a potential second pipeline from the territory, the shareholders say in a document sent to a broader investor base over the past 48 hours.
"It is obvious why Macquarie want to take over CTP [Central Petroleum] cheaply," said the group, represented by former ExxonMobil and BHP Billiton executive, and Central's 15th-biggest shareholder, Stuart Howes.
The shareholders, calling themselves OptionCo, are putting forward an alternative future for Central to remain as an independent company with a new board that would include Mr Howes, former minister in the Hawke and Keating governments Nick Bolkus and former BP senior executive Colin Goodall.
Macquarie declined to comment but some insiders cast doubt on the credibility of the rebel shareholder group's push. Central managing director Richard Cottee, who is on the board, described it as "an absolute waste of time and effort", pointing ouf the lack of alternative options for Central to raise the capital it needs to tap into the gas market opportunities.
"I'm very confident [the deal] will get through," Mr Cottee said. "But I'm a bit disappointed that if it doesn't get through, they've actually made the future a lot harder for the company."
"At present we are very confident that enough shareholders are unhappy with the currently proposed scheme that it will not be accepted by the quantity required," Mr Howes said in an email.
Central's board endorsed the offer from Macquarie, its main lender, in March after the bank's commodities and global markets division sweetened
an approach made last November.
The offer, which includes a security that would pay out an additional amount depending on drilling success, has been deemed "fair and reasonable" by Ernst & Young, hired by Central to assess it.
EY calculated the total value of Macquarie's offer at 20.6¢-21.7¢ a share, which it noted is "significantly" higher than Central's share price before the offer was made and above its own valuation of 15¢-20.5¢ a share.
Central shares closed down 1.5 per cent at 19.7¢.
The scheme of arrangement needs approval of 50 per cent of eligible voters representing at least 75 per cent of the register.
Central noted it had approached more than 80 groups seeking alternatives to Macquarie's offer without a better one emerging.
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