15th Apr 2016 07:00
LONDON (Alliance News) - The future of Petroceltic International PLC looks bleak after its largest shareholder Friday failed to gain the required amount of support from shareholders to advance its takeover offer for the financially-fragile oil and gas firm.
Worldview Capital Management has been battling to takeover the company and also rescue the business which is laden with debt and currently under protection from its creditors through a petition launched in the Irish court.
Worldview has launched the offer through Sunny Hill Ltd, and is the largest shareholder in the company with a 29.6% stake.
Excluding the shares already held by Worldview and its subsidiaries, the offerer had to secure acceptances from at least 90% of the remaining shares of Petroceltic - but as of Friday this only amounted to 54.6%, meaning the offer has lapsed and fallen through.
Those acceptances are equal to 38.5% of the issued share capital of Petroceltic.
"Accordingly, the offer is no longer capable of further acceptance and accepting Petroceltic shareholders and Sunny Hill have ceased to be bound by acceptances made and received before the closing date and time," said Sunny Hill, the company by which Worldview made its offer.
Although the takeover offer tabled by Worldview was at a significant discount to the value of Petroceltic at the time, it was the only offer on the table and the troubled oil and gas firm has already conceded another offer is unlikely.
The 3.0 pence per share offer for each Petroceltic share valued the company at only GBP6.4 million, an 83% discount to its market capitalisation of GBP15.0 million. Petroceltic shares have been suspended since February and look set to remain that way for the foreseeable future.
Notably, the board of Petroceltic could not originally make a recommendation when that takeover offer was originally made, but the offer was then rejected by another shareholder in Petroceltic called Skye Investments Ltd, which is headed up by current Petroceltic Chairman Robert Adair.
However, as the company's position deteriorated, Petroceltic made a U-turn and supported the discounted offer, as did Skye, claiming it was unlikely to find another buyer apart from Worldview that would be willing to discharge Petroceltic's substantial outstanding liabilities.
Petroceltic has recently had an examiner appointed to the company by the Irish court under a petition that was launched by Worldview when its takeover offer was originally rejected.
Petroceltic had previously said that, without the takeover offer from Worldview, the examinership would likely end up in the restructuring of Petroceltic's outstanding liabilities and provide for any outstanding shares in the company to be cancelled for no consideration.
Petroceltic said earlier this week that it would look to reveal the "best and final" offers for the company in "early May" - leaving shareholders with around a month of uncertainty to see whether a buyer can be found.
Importantly, Worldview purchased all of Petroceltic's outstanding debt in several tranches prior to the offer falling through Friday, and has since sold some of that debt to an unnamed third party investor. Worldview currently remains interested in around 68.0% of Petroceltic's outstanding senior bank facility, equal to around USD159.8 million of the total amount owed by the cash-strapped company, which is in excess of USD250.0 million.
By Joshua Warner; [email protected]; @JoshAlliance
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