Ghosts of deals past watching Peak chief

By PAULA OLIVER energy writer

The former Fay, Richwhite offices, now the nerve centre of Peak Petroleum's battle for Fletcher Energy, seem to dwarf their new occupants.

Riddled with history, the offices are the new home for the four-strong team of Peak chief Mark Dunphy, who this week stunned the market with a late proposal to buy Energy, his right-hand man John Sturgess, and two industrious-looking members of Canadian oil company Penn West.

"They're waiting to do due diligence," Mr Dunphy says of the Penn West men with a laugh.

Since tabling a proposal for Energy that appears to trump Royal Dutch Shell's and Apache's offer, Mr Dunphy has spent hours talking.

"We want shareholders to have a fair choice. That's all we've said," he says. "I think that's what the Fletcher directors should be doing."

Mr Dunphy, a former Fay, Richwhite banker with 10 years oil industry experience, is a confident man. He is now based in Dublin, and before that Australia heading Cultus Petroleum. But he is appealing to Kiwi nationalism with his proposal.

"This is about more than selling one or two assets to Shell. This is about New Zealand. The oil base in Taranaki is the heart of our resource base," he says, gazing out at the spectacular 27th storey view. "I come to this as Joe Public. I only hold 100 shares. This is absolutely the right thing to do to keep these assets for New Zealanders."

Those who have known Mr Dunphy say there are not many who could match his banking and oil background. If anyone has the contacts to pull together this deal, he has, they say. But they are not certain.

Fletcher Challenge bosses say Peak's proposal is not an offer - it is conditional on finance and due diligence, and they risk losing the firm Shell deal if they go further with the Peak proposal.

The questioning of Peak's financial backing has clearly riled Mr Dunphy. Under immense pressure, he seemed forced into yesterday reeling off a list of more names - National Australia Bank, BNZ, Arcus Investments, ACC, Alliance Capital, and New York-based Elliott Associates - to join FR Partners, Penn West and GPG.

He says he doesn't think it's his place to reveal everyone - even if it appears that could have helped his cause.

All the backing is conditional on due diligence, but Fletcher won't let Peak see the Energy books.

"Fletcher are misrepresenting our position here. We met with them on Monday and identified all the parties involved in our financing - we have more than enough firepower to pay on the day," he says. "We demonstrated that to them, quite clearly."

Fletcher Challenge says it has not seen a letter from Peak's banks.

After losing a court battle to delay Fletcher's shareholder meeting, Mr Dunphy's attention has now turned to securing enough support to stop the Shell deal being passed.