Shell Surprised By The Late Competiting Offer
Media Statement from Shell New Zealand
Tuesday 27 February 2001
SHELL SURPRISED BY THE LATE COMPETITING OFFER FOR FLETCHER CHALLENGE ENERGY
Shell and its partner Apache Corporation were surprised that the offer from Greymouth through its consortium company, Peak Petroleum, to purchase the Fletcher Challenge Energy Division should materialise at the eleventh hour.
The Shell/Apache offer is the result of a competitive open process which has been public since October of last year, and has the support of the Fletcher Challenge Board.
Shell notes that the new offer is subject to a number of conditions including due diligence and contemplates delaying the shareholders’ meeting until 23rd March with a consequent slippage in timing of possible completion of any transaction.
Shell doubts whether such an alternative offer gives the shareholders of Fletcher Challenge any certainty of a successful outcome because in addition to due diligence, regulatory and Court approvals are required and significant agreements both in New Zealand and elsewhere will have to be negotiated and concluded.
In contrast, the Shell/Apache transaction has completed all these steps and with the support of shareholders, will close by the end of March with shareholders receiving their cash and shares.
Shell New Zealand chairman, Ed Johnson, says this certainty must be a major factor for the Fletcher Challenge Energy shareholders but also for those of Fletcher Challenge Buildings and Forests in deciding how to vote at the shareholders’ meeting on 6th March.
The resolutions are linked so that a vote against one means that both fail, Mr Johnson says.
“Furthermore, the terms of the Agreement between Fletcher Challenge and Shell/Apache cease to have effect after 23rd March and neither Shell nor Apache have any obligation after that date. This would be a problem if the shareholders’ meeting is delayed”
Mr Johnson says Shell remains confident that shareholders will approve its offer because of its certainty, comprehensiveness and credibility.
“We maintain that our offer secures payment, and ensures that New Zealand’s energy future is secured. We have the commitment, credibility and competency to deliver a fair and fully valued deal to shareholders. We don’t see this coming from anywhere else.”