Pacific Rubiales Energy Corp. shareholders were set to reject the Colombian oil company’s pending takeover before a vote on the deal was delayed, according to the main opposition investor group.
O’Hara Administration Co. said in a statement that as of Thursday, almost 60 percent of shareholder votes cast by proxy were against the deal. The disclosure came a day after Bogota-based Pacific Rubiales said the vote would be delayed until later in July. The proposed buyers, Alfa SAB and Harbour Energy Ltd., said they requested more time to sway shareholders in favor of the $1.7 billion deal.
The delay of the final shareholder vote “will result in further waste of Pacific Rubiales resources in pursuit of a fatally flawed transaction and will delay much-needed change,” O’Hara said. O’Hara, which holds almost 20 percent of the stock, says the C$6.50 a share offer for Pacific Rubiales is insufficient.
The shareholder meeting to approve the deal was postponed to July 28 from July 7. Thursday was the deadline for submitting opposition votes by proxy.
The shares rose 4.4 percent today to C$5.26 as of 12:55 p.m. in Toronto trading, rallying from a low of C$4.37 yesterday before the postponement was announced.
“It is just a little bit unclear whether O’Hara has anything more in mind than trying to shake Alfa down for a higher bid,” Ian McCall, a money manager at Geneva-based Quesnell Capital SA said. “Let’s assume that their data is right, then this is the moment of truth for Alfa. If they really want this asset they have to raise their bid.”
Pacific Rubiales and Harbour didn’t immediately reply to an e-mail seeking comment on the O’Hara statement. Alfa declined to comment.
Alfa and Harbour have said their joint bid was fair and final, given the difficulties Pacific Rubiales would face surviving as an independent company amid a drop in output.
Pacific Rubiales has said it’s seeking to get Canadian courts to exclude some shares held by the O’Hara group from the vote. Pacific Rubiales alleges O’Hara’s purchase of part of its stake came in violation of Canadian securities laws.
Alfa may also be betting that oil prices will fall by the time the vote comes around, according to Monex Casa de Bolsa; a lower oil price would make the share offer for Pacific Rubiales look more attractive.
“Perhaps they’re waiting for a situation in the market, maybe due to Greece or an accord between Iran and the U.S., that could bring down the price of oil,” Monex analyst Fernando Bolanos said in a telephone interview.