17/09/2014 - 11:15

Neon to shut down takeover bid

17/09/2014 - 11:15

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Neon Energy chairman Alan Stein has warned the company’s shareholders against taking any action towards a takeover bid it received earlier in the month.

Neon Energy chairman Alan Stein has warned the company’s shareholders against taking any action towards a takeover bid it received earlier in the month.

Evoworld Corporation last week placed an unsolicited proportional takeover offer to Neon for 30 per cent of the shares it did not already own in the company.

In a letter to Neon’s shareholders today, Mr Stein told shareholders that the proposal provided no information regarding Evoworld’s intentions for the company and had serious concerns about the bid.

“Evoworld has provided no information regarding how they will add shareholder value, and consequently your board is concerned that Evoworld may only be interested in gaining control over your company’s cash assets,” Mr Stein said in the letter.

He said that despite a challenging period following disappointing results of the company’s Vietnamese drilling program last year, a significant cost overrun had the potential to ruin the company.

“However, management have been able to position the company for future growth by divesting underperforming assets, reducing corporate overheads, and settling the Vietnamese legal dispute for a monetary sum substantially lower than the claimed amount,” Mr Stein said.

He concluded by saying that the board was negotiating various mergers, acquisitions and reverse takeover options.

“I am confident that the Neon team, with its many years of experience in the oil and gas industry, can add substantial shareholder value by leveraging the company’s cash assets to secure an expanded portfolio of quality, high-impact, upstream oil and gas projects,” he said.

Neon’s share price rose by 2.8 per cent to 3.6 cents per share at 11:15am. 

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