Cue board rejects NZOG takeover offer
Directors of ASX-listed Cue Energy Resources have advised shareholders to reject the 10 Australian cents per share takeover mounted by New Zealand Oil & Gas [NZX: NZO], saying it "substantially undervalues" the company and may see unproven exploration opportunities sacrificed in favour of immediate cashflow from producing assets in New Zealand.
"NZOG has stated that its primary interest in Cue Energy is in Cue Energy's interest in the Maari and Manaia fields in New Zealand's Taranaki Basin, " a statement to the ASX from Cue's chief executive, David Biggs, said. If NZOG gained control of Cue, it "may cause Cue to change its priorities for growth and value creation from the board's current strategy."
That "may not be in the best interests of shareholders," Biggs said.
Cue shares were trading today just above the NZOG offer price, at 11 Australian cents a share. NZOG bought 19.99 percent of Cue from Todd Petroleum just before Christmas, and is obliged to make a full takeover offer for the company in order to increase its shareholding beyond 20 percent.
Bidder documents suggest NZOG would settle for a 30 percent stake and managing director Andrew Knight confirmed to Radio New Zealand that the remaining 7 percent of the company held by Todd was among the parcels the company was interested in buying.
Todd has made no comment on its intentions.
Further detail on the rejection would be forthcoming by Feb. 26.
NZOG shares have risen 3.2 percent in trading on the NZX today, to 65 cents.