Clyde makes late plea for loyalty
Saturday 08 February 1997
Despite a point-by-point rebuttal of many of Gulf's claims, however, its share price remained resolutely stuck at the new offer price and analysts continue to believe the Canadians may have done just enough to tip the balance in their favour.
After 50 days of acrimonious tit-for-tat between the two companies, Gulf finally increased its original 105p offer last week, increasing the value of its bid from pounds 432m to just under pounds 500m. Clyde's fate is expected to be decided by a handful of large institutional shareholders, four of which own half the oil producer's shares. Although some have previously said they would be unwilling to accept less than 135p, it is now felt that, in the absence of a higher offer from a white knight, 120p may just win the day.
Roy Franklin, managing director of Clyde, said: "Clyde has delivered, is delivering and will continue to deliver. Our strategy is working, as borne out by our 1996 results. What we have achieved is only a foretaste of what we aim to achieve in the future. I firmly believe our shareholders are better off rejecting this offer."
Having been forced under Takeover Panel rules to hold its fire after day 39 of the bid to give Gulf a week to marshal its final arguments, Clyde returned to the offensive in the letter, accusing Gulf of "seeking Clyde's valuable cash flow to help support its substantial debt burden".
According to Clyde, Gulf has net debts of about pounds 1.1bn, even after two equity issues in the past 12 months. "This huge pro forma net debt would represent some 3.5 times Gulf Canada's estimated pro forma 1997 discretionary cash flow. With these financial constraints on Gulf Canada, Clyde's shareholders should not be surprised that Gulf Canada is not prepared to offer full value for Clyde shares."
Gulf Canada dismissed Clyde's latest contribution to the bitter debate between the two: "Clyde's latest document smacks of desperation.
"Its comments about Gulf Canada's balance sheet are irrelevant for a cash bid and ill-conceived."
In its final offer Gulf made much of the assumptions employed by ERC, the oil consultant commissioned by Clyde to evaluate its asset value.
Clyde defended them yesterday as conservative and pointed out that some were the same as those used by SSI, a consultant working for Gulf in this bid, in a previous bid situation when it was working with Morgan Grenfell, the merchant bank acting for Gulf in this bid.
- 1 The black and blue dress: Makers considering a white and gold version
- 2 Husband and wife die holding hands within hours of each other after 67 years of marriage
- 3 PornHub turns masturbation into energy in bid to save the planet
- 5 Saudi Muslim cleric claims the Earth is 'stationary' and the sun rotates around it
Boris Nemtsov shot dead: Putin critic may have been murdered by Islamic extremists, says president-led committee
Stephen Hawking's wife Jane Wilde on their marriage breakdown: 'The family were left behind'
British are sexually uptight, dirty and drink too much – according to Spanish book
PornHub turns masturbation into energy in bid to save the planet
White and gold or blue and black – what colour is the dress? An eyewitness gives a definitive answer
New theory could prove how life began and disprove God
This is what it's like to be dead, according to a guy who died for a bit
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Ukip would cut billions from Scottish budget to fund English tax cuts
Russia's roadmap for annexing eastern Ukraine 'leaked from Vladimir Putin's office'
iJobs Money & Business
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...