By GEOFF SENESCALL
Oil giant Royal Dutch Shell played down market speculation yesterday that it will make a takeover bid for Fletcher Challenge Energy this week.
Shell spokesman Antonius Papaspiropoulos revealed that discussions were continuing with Fletcher Energy but said the company would not act until the Commerce Commission released its report on the deal.
The commission is not due to do so until Friday of next week.
Commission spokesman Vince Cholewa said that was the date being worked to and it was very unlikely a decision would be made this week.
Shell sought Commission Commission clearance late last month. In its submission it said it would sell several Fletcher Energy assets, including its Challenge petrol stations and its interest in NZ Refining, if its bid was successful.
Shell is understood to be the preferred bidder. But the process has been beset with delays, including gaining Commerce Commission approval - which has been put back twice.
Despite this, however, Fletcher Energy's share price has continued to hold strong. It closed yesterday at 892c, just slightly below an all-time high of 905c, and brokers remain bullish on the stock.
One recent broker report valued Fletcher Energy at up to $13 a share, based on a value of 950c for its oil assets and 350c for its holding in Capstone Trubines.
The valuation of Capstone, which is listed on Nasdaq in the US, compares to a market value of 505c for each of the Capstone shares Fletcher Energy holds. This discount is due to a sales restriction on Fletcher Energy, preventing it from disposing of its 10.8 per cent stake before the end of the year.
Meanwhile, flows from Fletcher Energy's Maui BD have been stronger than expected.
Brought onstream early this month, Maui BD increased NZ's crude oil production more than 60 per cent to about 25,000 barrels a day.
The new well flow increases NZ's total liquid oil production about 30 per cent to 40,000 barrels a day.
Shell coy about timing of takeover
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