Discount mulberry designs Outlet behind the actions of one of the top shareholders at Pacific Rubiales
One of the year more unusual takeovers took a step forward Wednesday when Pacific Rubiales Energy Corp., an explorer and producer of oil and natural gas in Latin America, mailed the information circular to its shareholders ahead of a special meeting on July 7 when they will have an opportunity to have their say on a proposed deal.But just as a number of market participants are trying to ascertain the motives behind the actions of the O Administration, the company second largest shareholder with a 19.82 per cent stake and which opposes the deal so too is the company.In its circular for the takeover by Alfa and Harbour at $6.50 a share, Pacific Rubiales said it met with the O Group and that the collection of so called joint actors not presented a plan nor any other offer or alternative to the Transaction. company added that O to be opportunistic investors who only recently purchased their shareholdings and do not represent the best interests of minority shareholders. but with a stake of almost 20 per cent the 13 member group has the potential to block the deal that requires two thirds support. And if the deal fails, the share price would presumably fall back to levels that existed at the time the deal was announced.The takeover of Pacific Rubiales Energy gets a little more complicatedPacific Rubiales Energy Corp agrees to takeover offer from Mexico’s Alfa Sab and Harbor EnergyThe company wants the transaction for many reasons: at $6.50 a share the offer represents a very healthy premium to the stock recent trading price; the price is at the top end of the valuation range; the buyers are reputable (Harbour is owned by EIG Global Energy Partners which manages almost $15 billion of investments) and are offering a fully funded $1.7 billion transaction. As well, the board has managed to squeeze an extra $1.50 from the buyers. Despite all of that, the share price hasn traded close to the offer price meaning investors remain skeptical.Given that Pacific Rubiales has a shareholder rights plan, O’Hara is restricted in how much additional stock it can purchase. If it goes above 20 per cent then it’s required to make an offer for the whole company, an expensive proposition requiring lots of debt. O has mused about the possibility of partnering strategic players and/or with other shareholders in order to present an alternative to enhance shareholder value. but to succeed, an offer with a strategic partner would have to be above $6.50 a share, would also have to fund the US$100 million termination fee and the US$60 million change of control payments and would require the support of Alfa, which has a 18.95 per cent stake. a lot of money which has to be paid if it wants to proceed on that route, said one London based hedge fund manager.Its end game is simply a higher price. But this situation is a little different, given that some members of the group are large recent buyers of the shares at prices in the $6.21 $6.29 range. That may be the objective, they have some hidden Plan B which no one understands, added the manager.