Judge rejects Cultus plea to stymie takeover by OMV

By Mark Reynolds

An Australian judge has thrown out an attempt by New Zealand-linked Cultus Petroleum to thwart an unwanted takeover bid from OMV of Austria.

Cultus had sought an injunction to prevent the offer going to shareholders, claiming OMV had based its $A160 million bid on confidential information. In the New South Wales Supreme Court, Judge Santow dismissed the application as "wasteful and expedient tactical litigation ... to buy time."

OMV Australia managing director Dr Wolfgang Zimmer welcomed the ruling.

If the action had succeeded it would have blocked the takeover offer, he said.

"Shareholders should be allowed to decide for themselves," he said.
OMV's offer is A66c (NZ78c) for each Cultus share, conditional on its securing at least 75 per cent of the company.

The offer has so far received only moderate support, with Cultus shares trading on the local market above 83c in the past few days.

Cultus was founded in New Zealand and its main shareholders are Sir Michael Fay and David Richwhite.

Those partners, along with a large number of smaller New Zealand shareholders, have dismissed the offer as too low, despite the fact that the Cultus share price has traded below the offer price for much of this year.

But the company is part of a consortium that recently confirmed that the Maari oilfield off Taranaki was an economic discovery of at least 40 million barrels of oil.

The main partner in the Maari discovery is Shell Petroleum, with a 49 per cent holding.

Cultus has a 30 per cent holding in the Maari prospect, which appears to be its first substantial oil discovery.

Last year an oil discovery in the Cornean Basin off the west coast of Australia was heralded as Cultus's holy grail.

But that has proved to be a fizzer.

Shell was also a partner in the Cornea prospect.

Investor enthusiasm over the Cornea discover last year saw Cultus's share price rise rapidly, and the company cashed in through a $A3-a-share cash issue that raised more than $A100 million. The offer burned many institutional investors in Australia and since then professional investors across the Tasman have stayed away from the stock.

Brokers have said that lack of institutional interest was a main reason for the slump in Cultus's share price that has enabled OMV to mount its offer.