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MAGELLAN'S BOARD RECOMMENDS AGAINST SAGASCO BID

 HARTFORD, Conn., May 25 /PRNewswire/ -- Magellan Petroleum Corporation (NASDAQ: MPET) today announced that its board of directors has rejected the unsolicited, hostile takeover attempt commenced on May 12 by SAGASCO Holdings Limited and several related entities for all outstanding shares of the company at $1.50 per share in cash. The board strongly recommended that its stockholders reject the offer. The company also said the lawsuits filed by SAGASCO and others in connection with the tender offer were without merit and would be vigorously defended.
 A special committee of the board comprised of two independent directors, Messrs. Walter McCann and Gordon Gibson, was created last week to study the offer and make a recommendation to the full board. Following consultations with TM Capital Corp., its financial advisor, the special committee concluded that (i) a sale of the company is not in the best interests of the company's stockholders at this time and (ii) the financial terms of the tender offer are inadequate. The full board of directors met yesterday and unanimously affirmed the conclusions of the special committee.
 Speaking on behalf of the board, Mr. James R. Joyce stated that "We strongly urge our stockholders not to tender their shares to SAGASCO. Just last September, SAGASCO paid the equivalent of $1.83 per share for a minority interest in the company, and now it is offering only $1.50 per share for the entire company." "Moreover," said Mr. Joyce, "the company's Australian subsidiary, MPAL, owns a controlling interest in the Palm Valley field located in the Northern Territory of Australia. That field is critical to the energy future of South and Central Australia and SAGASCO's offer does not reflect the importance of the field to SAGASCO and other major energy interests in Australia."
 "SAGASCO itself has said that the company and MPAL have `sound growth prospects, underpinned by existing cash flows.' We agree. We believe that when we conclude our next Palm Valley and Mereenie gas sales contract, we will be poised for dramatic improvement in cash flows and profits."
 "We also have high hopes for our interest in the Kotaneelee gas field located in Canada. That field has been in production for a relatively short time, with only two wells producing to date. We look forward to the commencement of revenues in the next few years. Moreover, the Canadian litigation involving that field is moving toward a trial later this year, and we remain confident of the merits of that case."
 On the same day it commenced the tender offer, SAGASCO filed suit in Delaware against the company and each director seeking to nullify provisions of the company's certificate of incorporation and by-laws that pertain to stockholder action generally and specify the procedures for effecting a merger or other business combination between the company and any "related" stockholder. By virtue of its current ownership of approximately 13.6 percent of the company, SAGASCO is a "related" stockholder for purposes of these provisions. Mr. Joyce indicated that the litigation would be vigorously defended, noting that some of the challenged provisions have been in effect since 1968.
 In addition, two similar purported class action lawsuits have been filed in Delaware against the company and each director alleging, among other things, that the company's directors have breached their fiduciary duties to stockholders. Mr. Joyce indicated that the company believes these lawsuits are without merit and intends to defend them vigorously.
 The company also said that it had rejected SAGASCO's invitation to negotiate a merger proposal in which Magellan stockholders would receive $1.50 per share.
 In a related development, the company also announced that Mr. Roy M. Hopkins has resigned his position as a director of the company and that Mr. James R. Joyce has been elected to fill the vacancy created by Mr. Hopkins' resignation. These changes put into effect the previously announced intentions of Mr. Hopkins and plans of MPC to elevate Mr. Joyce, who is slated to become president of MPC on July 1, 1993, to the position of director. Mr. Hopkins stated that he believes it would be in the best interests of the company and its stockholders to add Mr. Joyce to the board now, to provide continuity at the board level throughout the pendency of SAGASCO's offer. Mr. Hopkins stated that he was aware of the actions taken yesterday by the board with regard to the tender offer, and he indicated that he strongly supports those actions.
 -0- 5/25/93 R
 /CONTACT: James R. Joyce, secretary and treasurer of Magellan Petroleum, 203-293-0239/
 (MPET)


CO: Magellan Petroleum Corporation; SAGASCO Holdings Limited ST: Connecticut IN: OIL SU:

715 05-25-93 08:03 EDT PS -- NY014R -- 2016 05/25/93 09:06 EDT
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Publication:PR Newswire
Date:May 25, 1993
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