Total and Oil Search’s convoluted bid for InterOil received a boost on June 14, when a bid to seize control of the target company’s board failed. InterOil, in a statement, said its director nominees had been “overwhelmingly” re-elected by shareholders, with each official receiving at least 72% of the votes submitted.
The move comes as a rejoinder to Phil Mulacek, who founded InterOil in 1996 and ran the company until 2013. Mulacek has been critical of the takeover, saying it was “vastly inadequate” for InterOil’s shareholders. Mulacek and his allies may hold 7.6% of InterOil’s equity.
A statement from the company singled out Mulacek by name and said the “dissident resolutions” had been rejected with the reappointment of InterOil’s eight directors.
“We appreciate the strong support that we have received from our shareholders throughout this process. The results of the meeting underscore the recognition by our shareholders of the steps our board and management team have taken to transform InterOil,” it said.
The vote also rejected a bid by Mulacek for expense reimbursement.
In mid-May, InterOil said that the company under Mulacek had “no clearly articulated strategy and instead wasted shareholder money on infeasible projects that conflicted with the corporation’s agreement with the Papua New Guinea government and risked Petroleum Retention Licence (PRL) 15”. It went on to allege Mulacek had a conflict of interest with other InterOil shareholders, on the basis of his investment in Australian-listed Kina Petroleum, in addition to an interest in PNG Drilling Ventures, which has an interest in Raptor, Bobcat, Triceratops and also has a carried interest in future exploration wells.
Oil Search and InterOil struck a deal in late May. The two-step move sets out the acquisition of InterOil by Oil Search, with Total coming in to support the purchase and taking some of the target company’s equity in PRL 15.
Analysis from Bernstein Research came out in favour of the deal, as did proxy advisory services ISS and Glass Lewis.
Mulacek and his dissident group, the “Concerned InterOil Shareholders”, said the deal failed to account for Total’s cash payments and the “enormous upside potential of the Elk and Antelope resource”.