Edinburgh-based Bowleven, the Africa focused oil and gas exploration company, on Wednesday urged its shareholders to vote against all resolutions of Monaco-based activist shareholder Crown Ocean Capital (COC) at an upcoming general meeting of the firm.
Bowleven chairman Billy Allan claimed COC intended to “turn Bowleven into a cash dispenser for themselves” by taking control of the board.
COC controls more than 15% of Bowleven’s shares, which have risen almost 60% in the past year to around 31p, giving the firm a stock market value of roughly £100 million.
“Following its requisition of a general meeting (GM), issued on 24th January, Crown Ocean Capital (COC) the Monaco-based private investment vehicle, has continued to purchase Bowleven stock,” said the Edinburgh firm in a statement.
“In view of this, and ahead of the more detailed response within the circular convening the GM, Bowleven wishes to advise all shareholders of its view of key aspects of the COC proposals and why the board will unanimously be recommending shareholders vote against all resolutions.”
Bowleven claimed COC intended to take control of Bowleven without paying fair value and that “it has no credible strategy to maximise the value from the company’s key assets, Etinde and Bomono.”
It claimed COC’s stated intention was to convert Bowleven into a holding company involving “stripping the cash from Bowleven’s balance sheet” and “leaving it in a precarious position potentially unable to fund the investment necessary to realise any or all value from its Cameroon assets …”
Bowleven said COC “intends to remove the existing board and appoint their own representatives, placing the management of the company in the control of a single minority shareholder, with no remaining independent directors representing the interests of shareholders …”
Bowleven claimed that throughout its involvement with the Edinburgh firm COC had “displayed utter inconsistency” having first advocated a management buy out but then desisting “when the management made it clear that the offer price must be at a level the board could recommend.”
Bowleven claimed: “Their second approach was to support the existing management team, chairman and strategy, and to impose new non-executive directors, but the legal procedures were defective …
“Their third approach is to dismiss all board members, except the chief operating officer, who previously they sought to dismiss.”
Bowleven chairman Billy Allan said: “Ahead of our formal response, we wish to give timely advice to shareholders that COC’s proposal has absolutely no merit.
“It is self-evidently, and solely, a means to turn Bowleven into a cash dispenser for themselves, by taking control of the board.
“By contrast the company is progressing exciting plans at Etinde and Bomono that have the potential to deliver material upside.
“We see a clear choice for shareholders between losing control of the company, or retaining substantial upside in an E&P company at a favourable point in the market cycle.”