The unwillingness of major shareholders to consider the current offer is another setback for Gulf which was yesterday forced by the Takeover Panel to clarify a claim it made on Tuesday that it had never before increased an offer in a bid situation. In a statement issued late last night Gulf admitted that eight years ago, under previous management, it had made an offer that was subsequently increased.
The outcome of the bid will swing on the decisions of a handful of institutions, with ownership of Clyde concentrated in the hands of just four shareholders who control more than 50 per cent of the company's shares. Schroders, with 19 per cent, and PDFM, which has 14 per cent, are the biggest investors, with American institution Capital and Norwich Union holding another 17 per cent between them.
Persuading those four would secure victory, while Wittington, Prudential and CIN control another 11 per cent. Including those holdings, the total stake of the seven largest shareholders is 62 per cent.
Commenting on the bitter war of words that has erupted between the two companies, one large shareholder questioned Gulf's decision to highlight Clyde's dependence on acquiring oil reserves rather than finding them with the drill bit: "Gulf says the oil business has become a sellers' market in which the owners of oil assets are not prepared to give away value. In those circumstances why should I do so?"
He said it was possible to arrive at a valuation of between 135p and 150p a share using either Gulf's favoured net asset value approach or the cash flow model championed by Clyde and he indicated he would be unwilling to sell out for less than that range.
Another significant investor, who also preferred not to be named, said he saw little point in accepting an offer at the current market price only to reinvest the proceeds in a similarly rated oil stock when he continued to value the track record of Clyde's management. There is general agreement among investors that the chief executive, Roy Franklin, has successfully shifted Clyde away from an unsuccessful exploration strategy towards profitable acquisition-led growth.
Both fund managers believe Clyde will soon publish an estimate of its net asset value from industry consultant Energy Resource Consultants that puts a basic price tag of 105p on its assets. That compares with previous brokers' estimates of an average 76p and, with an appropriate premium for control, also implies an acceptable bid price of about 140p.
Clyde has until next Tuesday to complete its defence with Gulf given one more week after that to make a final offer.