Richard Phillips – Caliburn Partnership
+61 3 9935 6801 / +61 (0) 410 423 214
Queensland Gas Company (QGC) has performed a major back-flip by refusing to engage an independent expert in response to Santos’ $1.26 a share cash offer, having only months ago called for Sydney Gas to provide an independent expert’s report during QGC’s takeover bid for that company, Santos Chairman, Mr Stephen Gerlach, said today.
During its failed bid for Sydney Gas earlier this year, QGC claimed that Sydney Gas shareholders would be “better informed” if they were provided with an independent expert’s report.
However, QGC shareholders were yesterday told by their Chairman at the QGC annual general meeting that they would be left to form their own view about the value of their QGC shares.
QGC also previously stated that Sydney Gas’ failure to engage an independent expert was a “major omission” in Sydney Gas’ Target’s Statement.
Specifically, QGC told Sydney Gas (SGL) in a letter to shareholders lodged with the ASX on 21 April 2006:
SGL has not given shareholders an lndependent Expert’s valuation of QGC’s Offer by not including an lndependent Expert Report in the Target’s Statement. An lndependent Expert Report would have better informed SGL shareholders … SGL said the omission was due to difficulty in determining the value of QGC shares. This is precisely the role of an lndependent Expert … QGC believes an lndependent Expert’s Report would have shown the QGC offer is not just fair and reasonable but also generous to SGL shareholders.
“This is a major reversal on the part of QGC. If the absence of an independent expert’s report was a ‘major omission’ then, surely it must be now,” Mr Gerlach said.
“The lack of such a report deprives QGC shareholders of vital information on which to make an informed judgement about whether to accept Santos’ offer,” he said.
“The omission of an expert’s report from the Target’s Statement will severely undermine the credibility of a document which is meant to contain all information reasonably required by QGC shareholders to make an informed assessment of whether to accept Santos’ offer.”
Mr Gerlach said that given QGC’s Board’s rejection of Santos’ bid on value grounds, QGC shareholders were entitled to know their Board’s view on value, to support such a decision.
“QGC has simply turned a blind eye to the ASX release made about five weeks ago by Santos, challenging QGC to provide a detailed and credible valuation report in its Target’s Statement to support QGC’s claims that Santos’ offer price of $1.26 undervalues the company,” he said
“Rather than engaging an independent expert to provide the one piece of information shareholders really want to know – how much are my QGC shares worth? – QGC has spent the past five weeks releasing volumes of information to the market through more than 20 ASX releases”.