Evoworld an unfortunate distraction: Neon
Neon Energy’s embattled board says a hostile proportional takeover bid from its biggest shareholder is priced 12.5 per cent below the company’s actual worth.
Dismissing Evoworld Corp’s 3.5¢ bid as “an unfortunate distraction”, Neon said it had already received third-party interest in its newly acquired exploration permit off Dampier, its sole asset apart from about $26 million in cash.
Neon, which is trying to rebuild after a disastrous exploration campaign off Vietnam that proved near-fatal for the company, calculates its net tangible asset backing to be 4¢ a share.
Neon shares gained 0.1¢ to 3.6¢.
In his letter to shareholders, Neon chairman Alan Stein said a merger or reverse takeover were options being considered by the board to create value for investors.
“Your board regards the Evoworld offer as an unfortunate distraction and remains determined to create significant shareholder value by directing the company’s material cash resources towards quality petroleum exploration and production assets,” he said.
Evoworld is unlikely to be swayed by the letter, having on Monday lodged a second notice requisitioning a meeting of Neon shareholders at which the suitor wants to sack the board and replace directors with its nominees.
Evoworld, run by Tim Kestell and Peter Pynes and backed by MACA founder Ross Williams, has been buying Neon stock on-market to last night control 16.8 per cent.
The suitor is expected to keep buying until it gets to 19.9 per cent, and hopes the proportional takeover will take it to 44 per cent.
