15th May 2015 13:26
LONDON (Alliance News) - Forum Energy PLC Friday said it has requested for its shares be cancelled from trading on AIM so it can become a private limited company following on from a takeover offer from Philex Petroleum Corp.
Philex Petroleum is seeking to acquire the minority interests in Forum shares that are not already held by Philex Concert Parties for a cash consideration of 20.0 pence per share.
Forum said that the Philex Concert Parties and its second largest shareholder, Tidemark Holdings Ltd, hold an aggregate 90.96% stake in Forum Energy. Both shareholders have already entered into irrevocable undertakings to vote in favour of the takeover offer.
Philex Concert Parties currently holds a 63.82% stake in the company whilst Tidemark holds a 27.14% stake.
Shareholders will vote on the propositions concerning the share cancellation and takeover offer at a meeting on June 25.
Forum warned that shareholders who do not accept the offer will, on completion of the cancellation, hold shares in a private limited company with no market facility for dealing in the shares with no publicly quoted prices.
"The directors recommend that all shareholders consult their duly authorised independent advisers before they make a decision as to whether or not to accept the offer in respect of some, all or none of their ordinary shares, in order to obtain advice relevant to their particular circumstances," it said in a statement.
Forum's principal asset is a 70% stake in SC72, an oil and gas contract to develop a gas discovery which was put into force majeure by the Philippine Department of Energy because the relevant contract area falls within the territorial disputed area of the West Philippine Sea which is the subject of an United Nations arbitration process between the Republic of Philippines and the People's Republic of China.
"There can be no guarantee as to if and when the force majeure on SC72 will be lifted. If it is lifted, there can be no guarantee that the DOE will grant the necessary approvals to proceed with the work required to satisfy the Company's obligations under the second sub-phase of SC72," said Forum.
Forum said it is costing around GBP300,000 per year to maintain its AIM listing and believes it is not in shareholders interest to remain a listed company.
"In view of the ongoing uncertainty as to if and when the force majeure on SC72 will be lifted, the board has concluded that the costs of maintaining the admission of the Ordinary Shares to trading on AIM are likely to outweigh the potential benefits," said Forum.
Forum shares were down 1.7% to 17.70 pence per share on Friday afternoon.
By Joshua Warner; [email protected]; @JoshAlliance
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