Slaying Goliath to save the Dragon
In the blue corner – Emirates National Oil Company (ENOC), which recently hired proxy solicitation firm Georgeson to get out the shareholder vote in favour of its $1.9 billion bid to buy out the 48 percent of Dragon Oil it doesn’t already own. (Georgeson say they are the oldest and best shareholder consultancy in the business, and helped engineer a record turnout for the HBOS AGM that approved Lloyds’s takeover of the bank.)
In the red corner – retail investors keen to “Save Dragon Oil”. Armed with a website and a 3,000-page printout detailing of the Turkmenistan-focused oil explorer’s investors…
Squeezing out a smaller premium
PepsiCo Inc’s offers to buy the remaining stakes in its two largest bottlers came as a surprise, but the biggest surprise may be the scant 17.1 percent premium in the overtures. PepsiCo’s bid to buy the rest of the bottlers it does not already own constitutes a so-called “squeeze-out,” or a transaction in which the buyer already owned some portion of the target and was seeking to own the 100 percent. Even given that squeeze-out premiums are typically lower than cases where a buyer did not own any part of the target and was seeking to acquire 100 percent, this one looks particularly low, according to FactSet Mergerstat. The average 1-day premium for a squeeze-out deal was 35.77 percent versus the average 1-day premium of 44.10 percent for a full acquisition, FactSet Mergerstat said. Put another way, the PepsiCo premium was half the normal premium for a typical squeeze-out. Both Pepsi Bottling Group and PepsiAmericas rose above PepsiCo’s offer, suggesting that shareholders expect the deal to get a little sweeter.
from Global Investing:
Careful what you say
Bank executives beware. Turn your microphones off during what are likely to be stormy shareholder meetings this year.
Insults are likely to fly at many bank AGMs this year from shareholders angry at their board for losing billions, sending shares crashing, making ill-advised purchases or for their role in the global economic crisis. Bankers are unpopular after more than a year of grim news.
But an unnamed director at Santander lacked humility this week. After heated questions from the floor about the Spanish bank's purchase of U.S. lender Sovereign and its exposure to the alleged Bernie Madoff fraud, some shareholders applauded a critical comment.
"Bastards. Listen to them clapping," the director was heard saying after his mic was left on.
It rekindled memories of Jeffrey Skilling, the disgraced head of Enron who once called a critical analyst an "asshole" in an earnings conference call. But shareholder meetings are often stormy in Spain, and there has been little backlash, whereas in Britain and elsewhere the latest comment could have prompted a bigger furore and a hunt for the culprit.
But it serves as a reminder to executives to put their hard hats on when they meet shareholders this year.
The problem is that managers and directors think that a company is their own little empire, to be done with as they see fit. Shareholders are not seen as owners, but only as an irritant.
Congratulations to the operators of http://www.savedragon.com.ENOC‘s bid, which has already been rejected by some of the larger minority shareholders and appears to be based upon what ENOC can afford rather than what is it worth. The bid is opportunistic and seriously undervalues the company.