Shell wins landslide vote

By PAULA OLIVER and ELLEN READ

Fletcher Energy is on track to be sold to Royal Dutch Shell and Apache Corporation, after a sometimes-heated shareholders' meeting approved the deal.

The sale means that one of the country's largest business icons, Fletcher Challenge, will be dismantled.

Yesterday's shareholders' meeting to decide the fate of all three Fletcher divisions had been given top billing after Shell's firm offer for Energy was countered last week by a little-known local consortium. The late move had threatened to derail the entire Fletcher Challenge separation process.

Peak Petroleum made a valiant last-ditch attempt to sway shareholders to vote against the Shell proposal at yesterday's meeting, but in the end it was unsuccessful.

More than 85 per cent of votes were for the Shell deal, which needed only 75 per cent approval. At present share prices, Energy shareholders will receive the equivalent of $10.02 for each share - a mixture of cash, shares in US-based Capstone Turbines and shares in new Fletcher offshoot Rubicon.

Fletcher chairman Roderick Deane said he had been quietly confident before the meeting, and that the certainty of the Shell deal had appeared to outweigh the uncertainty of Peak's proposal.

"It would not surprise us to hear more from Peak, but I think the majorities which have been achieved at this meeting, once they're finalised, will turn out to be very substantial," he said.

Shell spokesman Raoul Restucci described the newly acquired assets as the jewel in the oil giant's Asia Pacific portfolio.

Peak Petroleum head Mark Dunphy said the outcome was disappointing. But, he said, "tomorrow's another day and we'll get up bright and smiling and figure out which way we're headed."

Mr Dunphy had made an impassioned 10-minute plea to shareholders to vote against the Shell offer. He appealed to their patriotism by asking all New Zealanders to put up their hands, and then said Shell's offer undervalued Energy by between $US600 million and $US700 million ($1.4 billion and $1.6 billion).

"We are proud we have already delivered extra value for Fletcher Energy shareholders," he said, referring to Shell's increased offer.

Mr Dunphy's closely timed address was followed by Shell representative Mr Restucci, who warned shareholders that the oil giant would walk away if the deal was not passed.

"You are asking us to stay on for another six months - and we cannot afford the resources to do that," he said. "There's a limit with every purchase, and this is ours. We have to move on."

He repeated that Shell was not an asset stripper or a corporate raider, and responded to Mr Dunphy's patriotic call by saying Shell had been in New Zealand for 90 years, compared to Peak's extremely short life span.

After hearing both sides, and a speech from Dr Deane that made it clear Fletcher Challenge was in support of the Shell deal, shareholders fired a barrage of questions at the Fletcher chairman.

Many shareholders asked if Mr Dunphy would guarantee to make an offer if they voted against the Shell deal.

They took shots at Fletcher's directors for not handling the company well over recent decades, and accused Mr Dunphy of overplaying the emotion card.

In the end their questions were academic, and when the deal finally went to a vote after more than three hours, a huge majority voted to sell.

The deal is still subject to court approval, however, with a hearing scheduled for March 15.

What Happens Next


13 March: Last date for supporters and opponents of the Shell-Apache deal to file notices of appearance or notices of opposition, to allow them to be heard at the final court hearing to ratify the Fletcher Challenge restructuring.

15 March: Final court hearing.

23 March: Effective date for Building and Energy transactions.

26 March: Building and Rubicon shares scheduled to begin trading on the NZSE and ASX.

28 March: Last day for mailing cheques to Energy shareholders.

27 April: First date on which Capstone entitlements will be exchanged into Capstone shares.

Late April: Anticipated payment of first interim dividend for Fletcher Building shares - 6c a share.