Group asks court to delay Fletcher Challenge acquisition

A group, including Calgary-based Penn West Petroleum Ltd., has asked the New Zealand High Court to delay a Mar. 6 shareholders' vote on an offer by Royal Dutch/Shell Group and Apache Corp. for New Zealand company Fletcher Challenge Energy Ltd.

March 1, 2001

2 min read

By the OGJ Online Staff

HOUSTON, Mar. 1�Units of Royal/Shell Group and Apache Corp. Thursday raised the cash portion of their offer for Fletcher Challenge Energy Ltd. from $3.34/share to $3.55/share while a potential rival bidder is fighting for consideration.

Peak Petroleum Co., a consortium of New Zealand and Canadian investors, said Wednesday it plans to offer a minimum of $3.70/share but needs more time to complete its due diligence. Peak Petroleum asked Fletcher Challenge to reschedule the shareholders� meeting from Mar. 6 to Mar. 23.

The Fletcher Challenge board unanimously recommended shareholders approves the revised Shell-Apache offer and refused to delay the vote.

Apache seeks to acquire Fletcher Challenge Energy�s holdings in Argentina and western Canada while Shell seeks to acquire Fletcher Challenge Energy�s subsidiaries in New Zealand and Brunei.

If approved, the transaction is slated to close before April. Shell and Apache emphasized the increased price was the final offer and that, if shareholders fail to approve the transaction, then the two companies� obligations under the agreement will terminate.

Raoul Restucci, Shell Overseas Holding Ltd. regional exploration and production director, said, "We are committed to this business and to building on our 90-year history in New Zealand, and we believe that this increased offer demonstrates that commitment."

Raymond Plank, Apache chairman and CEO, said, "In an effort to bring closure to this lengthy and arduous process, we are increasing our offer. Make no mistake: This is our final offer. Should our definitive agreement not be supported by the shareholder vote, we will exercise our right to walk."

Mark Dunphy, Peak Petroleum chairman, said, "Our proposal is not only a better deal for Fletcher Energy shareholders, it is a better deal for the country," of New Zealand.