OG Oil & Gas has sweetened its partial takeover bid for New Zealand Oil & Gas, winning over the Kiwi energy explorer's independent directors.
The oil and gas division of Ofer Global Group will pay 78 cents per share to lift its NZOG stake to a maximum of 70 per cent, with an offer document expected to be released to the NZX this week and mailed to shareholders next week, the New Zealand firm said in a statement. That's up from the 77 cents per share bid OGOG initially floated, and still trumps the 72 cents per share offer by rival Zeta Resources. The new OGOG bid won over NZOG's independent directors who unanimously recommend shareholders accept the revised offer.
"We are pleased that OGOG's vision for New Zealand Oil & Gas aligns strongly with our own strategy," chair Rodger Finlay said. "Personally I think it is important that the OGOG offer succeeds, so I will accept the OGOG offer for all of the New Zealand Oil & Gas shares that I own or control (comprising approximately 0.5 per cent of the total New Zealand Oil & Gas shares)."
OGOG threw in its rival bid to preserve NZOG's exploration opportunities and has named the Barque prospect off the Canterbury coast as too interesting to ignore. If it wins over shareholders it plans to find international partners for the deepwater prospect, which was ranked ninth among the world's top oil and gas targets in a survey presented to a recent petroleum conference in New Zealand.
"We believe the increased offer for New Zealand Oil & Gas is fair and one that we are confident that shareholders will find attractive," OGOG chief executive Alastair McGregor said. "OGOG believes strongly in the potential of the New Zealand Oil & Gas assets and is excited to have the opportunity to invest in New Zealand, a country where OGOG affiliates have worked successfully in the past."
In contrast, Zeta wants NZOG to scale back its business and has dangled the possibility of a $50 million capital return to shareholders in the next six months. NZOG's independent directors rejected the Zeta offer as too low.
Both bids are partial offers for at least a controlling interest in the Kiwi company.
The competing bidders will face each other at NZOG's annual meeting later this month, with Zeta-aligned Duncan Saville seeking re-election to the board, and OGOG's McGregor also pursuing a spot. NZOG hasn't made a recommendation on the elections, and a decision on how Finlay will cast proxy votes will be made once OGOG has made a formal offer.
NZOG shares last traded at 74.5 cents and have gained 18 per cent so far this year.