Investors rise up in takeover tussles

Shareholder activism comes into play with rising oil and gas M&A activity.

Shareholder activism was thick on the ground in the small to mid-tier oil and gas sector yesterday.

The same day contrarian fund Allan Gray, which owns 19 per cent of Roc Oil, told the board in no uncertain terms it was not going to let the company be taken over without a vote, a US group known as Lone Star Value issued an out-of-the-blue statement saying it was preparing to take over the board of Perth-based Antares Energy.

The looming meetings come as shareholders in Nexus Group, including Bechtel executive director Andrew Greig, tried to block Seven Group Holdings from achieving a friendly 2c-a-share takeover at a vote in June.

Allan Gray managing director Simon Marais had flagged he would call a meeting, and he did so yesterday. But he disappointed those expecting a board spill as his means of showing displeasure at the all-scrip, nil-premium reverse takeover of Roc by Horizon Oil.

That deal will see Horizon shareholders, who will own 58 per cent of a $900 million merged company, vote to be taken over by Roc in a deal that will give them effective control.

Instead of a spill, Marais called for an extraordinary general meeting to change the Roc constitution so that it will not be able to issue more than 30 per cent of its share capital without a shareholder vote.

He said if 75 per cent of shareholders voted for the amendment, Roc would then need to hold a meeting on the Horizon deal. “It is a matter of principle and good corporate governance,” Marais said.

“While shareholders understand that the deal falls within ASX regulations, proceeding with this merger without formally considering what Roc shareholders think is fundamentally unfair and not in the interests of shareholder transparency.”

The meeting needs to be called in the next 21 days.

Roc chairman Mike Harding, who will chair the merged company, has said other shareholders he has spoken to overwhelmingly support the deal, so Allan Gray could struggle to get a 75 per cent vote.

Antares, run by US-based chairman, chief executive and 4 per cent shareholder James Cruickshank, is in the sights of new significant shareholder Lone Star, which on Wednesday declared it had built a 5.3 per cent stake -- just enough to call an EGM.

Antares, which has issued $6m of convertible notes in the past few weeks, has shale ground in the Permian Basin in Texas, the region where BHP Billiton is targeting onshore US growth. In a press release yesterday (Antares said it had yet to receive the letter), Lone Star said it wanted to add five unnamed directors with geological, financial, corporate and legal expertise.

“We believe this expertise is needed on the Antares board to improve corporate governance and create a strategic plan to enhance value for the benefit of all shareholders,” said Lone Star, which is based in the hedge fund haven of Connecticut.