NZOG vows strategy review after investors reject takeover

New Zealand Oil & Gas has promised a review of the firm’s strategy after minority holders rejected a takeover by major shareholder Ofer Global.

The 74 cents-a-share offer, through a scheme of arrangement, was already lost on the basis of postal and electronic votes unless shareholders attending yesterday’s special meeting changed their positions.

The final result showed just over 63 per cent of minority shares were voted against the plan.

During an at times testy meeting, shareholders complained at the low probability of commercial success the offer ascribed to the firm’s stake in the Ironbark prospect off northwestern Australia, a lack of transparency around the process, and the opportunistic timing of the offer, given the potential uplift NZOG may gain from other players’ drilling planned off the South Island next year. Rosalind Archer, who with fellow independent director Rod Ritchie had recommended the scheme of arrangement, said given the outcome, there would need to be a “strategic refresh” on the firm’s future direction and how “we can [go there] together”.

Archer and Ritchie were in a tough spot after recommending shareholders accept OGOG’s earlier 62 cent offer. Vocal opposition saw that subsequently increased to a final 74 cents, further reinforcing a perception among shareholders that the offer was opportunistic.

Northington Partners had valued NZOG shares between 62 and 84 cents.

The Accident Compensation Corporation is one of the company’s biggest shareholders with a 1.8 per cent stake.

Guy Elliffe, an investment manager with the corporation, said the firm was “drawing a long bow” on investors’ appetite for exploration and he urged the company to canvass investors widely during the coming review.

Elliffe also said the skills needed of independent directors in conducting such a review were not necessarily the same as the exploration and production skills that Archer and Ritchie brought to the role.

Archer said she couldn’t promise a change in board structure, but said chair Sam Kellner had heard shareholders’ complaints.