Focus on separation at Fletcher

By Phil Boeyen, ShareChat Business News Editor

Wednesday 7th March 2001

Fletcher Challenge executives will be breathing a sigh of relief as they move to complete the long-running saga of separating the company's letter stocks.

While Peak Petroleum gave the company, and Shell and Apache, a run for their money up to the last moment, in the end more than 85% of shareholders voted to sell Energy (NZSE: FEG) to the original bidders.

Shareholders can certainly be thankful Peak came on the scene, forcing Shell to improve the cash component of its bid, but whether Shell would have added even more money to the pot if the Energy sale had been voted down will remain unknown.

While it was adamant its recent cash increase was its final offer, after putting so much effort into the bid it's feasible to think that the cash-rich energy company would have been prepared to go further.

Fletcher chairman, Rod Deane, says the support for the Energy sale was "absolutely the right decision in light of the uncertainty surrounding the ability of the Peak/Greymouth consortium to deliver a firm offer".

"Under Shell and Apache's ownership and management the assets will be in the hands of one of the world's most experienced oil and gas explorers and producers.

"The last minute proposal from Peak has been exciting for shareholders. We have seen democracy in action and shareholders have made their choice."

Mr Deane has also sounded almost grateful for the part Peak played in the final bids for Energy.

"It must not be forgotten that while Peak has not managed to achieve their main objective, they have by their actions delivered a further increase in value for Fletcher Energy shareholders by forcing Shell and Apache to increase their offer price."

"This was no small feat."

Energy shareholders are due to receive the US$3.55 cash payout, one Capstone Turbine share for each 70 Fletcher Challenge Energy shares, and a share in Rubicon for each FEG share by the end of March.

That's also the date when the new Fletcher company - biotech focused Rubicon - is due to list on both the New Zealand and Australian exchanges.

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