12/03/2015 - 10:31

Neon backs out of Evoworld offer

12/03/2015 - 10:31

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Oil and gas company Neon Energy has reversed its decision to accept Evoworld Corporation’s takeover proposal, after an independent expert's report found the deal to be unfair.

Neon backs out of Evoworld offer

Oil and gas company Neon Energy has reversed its decision to accept Evoworld Corporation’s takeover proposal, after an independent expert's report found the deal to be unfair.

In a statement today, Neon said it sought BDO Corporate Finance’s expert opinion on Evoworld’s offer to buy 50 per cent of the shares it didn’t already own in the company.

It would give Evoworld 61.3 per cent ownership of Neon, which BDO has concluded would not be fair and reasonable for Neon shareholders.

BDO said the offer was not a premium to Neon’s quality management plan, and if shareholders accepted the offer, they would not benefit completely from the potential upside of the company’s future projects.

BDO also said it would be risky accepting the offer because of Evoworld’s lack of experience as an oil and gas explorer.

As a result of the findings, Neon directors Alan Stein and Ken Charsinsky resolved to postpone the proportional bid meeiting until March 25, to allow shareholders to fully consider the proposal in light of BDO’s report.

“In light of the change in BDO’s opinion, the independent directors consider that they can no longer recommend that Neon shareholders accept the offer or vote to approve the offer at the proportional bid meeting,” Neon said in a statement.

Evoworld has agreed to extend the closing date of its offer until April 9.

Neon shares dropped 6.2 per cent to 3 cents per share at 10:30am. 

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