By the OGJ Online Staff
HOUSTON, Apr. 16 -- Hurricane Hydrocarbons Ltd., Calgary, Monday called a proposed takeover offer by Central Asian Industrial Holdings NV (CAIH) �ridiculously low� and said it was in shareholders� best interest to limit CAIH�s stake in Hurricane to 30%.
On Apr. 12, CAIH proposed to acquire 18.4 million shares of Hurricane at $10.25/share (Can.) for a total of $189 million (Can.), although no actual offer has yet been made to shareholders. The proposed offer would raise CAIH�s ownership in Hurricane to 53% from 33%.
Bernard Isautier, Hurricane chairman, said Monday, �The CAIH proposal would breach the shareholders agreement between CAIH and Hurricane, which provides that CAIH's ownership cannot exceed 30% unless CAIH acquires shares through an offer for all shares of the company.�
The proposed offer also is prohibited under a shareholders rights plan and, if successful, would �result in a massive dilution of CAIH's position,� Isautier added.
The proposed offer does not reflect the potential of Hurricane, which produces and refines crude in Kazakhstan (OGJ Online, Feb. 26, 2000), claims the company. Hurricane reported average yearly production of 84,090 b/d in 2000. It plans to increase production by 30% to average 109,000 b/d and has a $180 million (US) budget in 2001 for pipeline construction, facilities and field development.
�The potential offer price of $10.25/share is ridiculously low, an opinion shared unanimously by all contacted shareholders and those communicating spontaneously with the company. This price would translate to a value of approximately 3 times earnings per share for year 2000,� Isautier said.
CAIH is based in Netherlands Antilles, and is an affiliate of Kazakh banking group Kazkommertsbank.