Berkley Opens Data Rooms, Hunt Extends Offer's Time Period
Hunt Oil Co.'s unsolicited bid to purchase all of the issued and
outstanding shares of Berkley Petroleum Corp. for C$10 per share
was received as expected by Berkley shareholders, with the
Dallas-based company extending an olive branch by saying it would
lengthen the time period for its offer to be reviewed.
However, in an attempt to lure other buyers, Berkley is opening
access to its data rooms beginning this week to anyone willing to
sign a confidentiality agreement.
Hunt subsidiary Hunt Oil Canadian Acquisition II Corp. launched
the uninvited, $C1.03 billion (US$710 million) offer to buy
Calgary-based Berkley, Canada's 27th-largest gas producer, the last
week of 2000. After receiving the official offer last week, Berkley
said its special committee of independent directors would review
the offer, and said it has retained Peters & Co. Ltd. and
Scotia Capital Inc. to review and advise it.
Alan Pettie, chair of Berkley's special committee, said the
company would pursue all alternatives to the Hunt offer to
"maximize value for Berkley's shareholders." Under a retaliatory
Shareholder Protection Plan, enacted following the Hunt bid, the
board voted to give itself "sufficient time" to consider any
takeover bids and enough time to generate competing bids and
Under the protection plan, the Hunt offer did not qualify as a
"permitted bid" because it did not meet certain requirements that
protect the interests of shareholders including, among other
things, being open for acceptance up to 60 days. Berkley's board
said the 60-day period is required to allow it to evaluate the
offer and pursue alternatives. In response, Hunt, which already
owns about 10% of Berkley, said it would extend its offer - but not
by four months.
"We recognize that Berkley has work to do in connection with our
offer," said Craig Glick, senior vice president of Hunt Oil.
"Therefore, our offer will remain open substantially longer than
the customary 21-day period. This additional time ensures Berkley
will have sufficient time to explore all alternatives by Feb. 6,
and that the Shareholder Rights Plan adopted by Berkley in response
to our offer will have served its purpose and outlived its
usefulness prior to that time."
Hunt, whose Canadian offices are headquartered in Calgary, is
working on its third attempt to secure more Canadian holdings. It
lost a bidding war against Anderson Exploration Ltd. for Ulster
Petroleums Ltd. in April 2000, but two months later succeeded in
scooping up Newport Petroleum Corp. with a friendly offer of C$489
million (US$337 million).
Hunt's targets have all belonged to a large, frustrated segment
of the Canadian gas companies that have been better at exploration
and production than at persuading investment houses to bid up
under-valued share prices. Of the latest attempt by Hunt, analysts
predicted it would prove to be only an opening bid. Berkley entered
2000 with gas production approaching 150 MMcf/d and a formidable
array of growth prospects including operations in the prolific Fort
Liard area of the southern Northwest Territories.
Carolyn Davis, Houston
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