Edinburgh-based oil and gas firm Bowleven — which last week had most of its board ousted by Monaco-based activist shareholder Crown Ocean Capital (COC) — said it is launching a strategic review of all its options including a sale or merger of the firm.
Shares of the Africa-focused oil and gas exploration company rose 2% to around 37p on the news, giving it a stock market value of roughly £115 million.
Bowleven issued a stock exchange statement saying: “In light of results of the general meeting held on 14 March 2017 and in the interest of maximising value for all shareholders, Bowleven announces that it is launching a strategic review of all options available to the company …
“The options to be considered during the strategic review may include, but are not limited to, a review of the strategy proposed by Crown Ocean Capital in its letter to Bowleven shareholders dated 15 February 2017, a farm-out or sale of one or more of the company’s existing assets or a corporate transaction such as a merger with or sale of the company to a third party.”
At the general meeting Crown Ocean ousted five directors at Bowleven including chief executive Kevin Hart and chief financial officer Kerry Crawford — but chairman William Allan survived.
Crown Ocean, which controls about 22% of Bowleven shares, succeeded in removing Hart, Crawford, John Martin, Tim Sullivan and Philip Tracy as directors and in having two of its nominees, Eli Chahin and Christopher Ashworth, appointed to the Bowleven board to drive the company in a new direction.
Then last Friday Crown Ocean requisitioned another general meeting to “remove” Allan as a director and appoint two “independent” directors Julien Balkany and Didier Lechartier.
Balkany is a partner of New York-based hedge fund Nanes Balkany Partners LLC, which targets investments in publicly traded oil and gas companies, and a brother of French politician Patrick Balkany.
Lechartier is a former executive at a number of oil and gas companies.
Crown Ocean warned that it is “no longer appropriate for current executives to continue to hold their pre-existing executive roles.”
Last Friday, Crown Ocean said: “William MacDonald Allan, the current chairman of Bowleven, however does not acknowledge that shareholders voted for change in leadership and direction and is unwilling to implement the clear new mandate for the new board proposed and voted for by the voting majority of shareholders.
“As a result, we now see a significant danger posed by either a dysfunctional board or one controlled by Mr. Allan who could use his casting vote to maintain the status quo and protect his and the old leadership’s entrenched positions.
“We note that Kevin Hart still acts as chief executive of the company and the other removed executive board member Kerry Crawford remains a Bowleven employee without termination notices having been served.
“We understand that Mr. Allan has no intention to change this. We also want to remind shareholders that Mr. Allan does not own a single share in Bowleven as of 31 December 2016.
“This situation is clearly not sustainable and not in the best interest of shareholders.
“Mr. Allan needs to be removed to see the change in leadership and direction at the company that the voting majority of shareholders have voted for.
“We therefore urge shareholders to vote to remove Mr. Allan.
“In addition, we propose two new and independent board directors with extensive oil and gas sector expertise, board level experience and a strong value creation track record.
“We note that Mr. Lechartier is an oil and gas industry veteran with 25 years of operational experience and an in-depth knowledge of and relationships in the African market, including Cameroon and other West African countries.”