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.