In response to Hunt Oil Co.’s unsolicited C$1.03 billion (US$710million) offer to buy Berkley Petroleum last week, Berkley announcedthat it has put together a special committee of independent members ofthe board to consider alternatives to the takeover offer itcategorized as “opportunistic and inadequate” (see Daily GPI, Dec. 29).

“The board, together with its advisors, will review the Huntoffer when and if it is received, following which the board willissue a formal communication to shareholders,” said Alan Pettie,chairman of the special committee. “As previously stated,management of Berkley believes that the Hunt offer is opportunisticand does not reflect the true value of the company. The board,together with management and financial advisors, intends tovigorously pursue all alternatives to maximize value for Berkley’sshareholders.”

In addition to empowering a special committee, the board ofdirectors has also approved the adoption of a temporary shareholderrights plan. Under the plan, the board will be given sufficienttime to consider any take-over bids made for Berkley, as well asenough time to generate competing bids and alternative proposals.

The company wanted to make it clear that the rights plan is notintended to prevent take-over bids. Bids that meet certainrequirements and protect the interests of shareholders areconsidered under the rights plan to be “permitted bids.” Permittedbids are defined as take-over bids made by way of circular for alloutstanding common shares, which remains open for at least 60 daysand satisfies certain other conditions.

The rights plan must still receive regulatory approvals beforeit can be attached to all of Berkley’s common shares. Once the planis in effect, it will be good for a period of 120 days.

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