(Adds quote from O’Hara spokesman)
By Julie Gordon
VANCOUVER, June 18 (Reuters) - Pacific Rubiales Energy’s largest group of shareholders has begun a proxy fight to block the roughly C$2 billion ($1.6 billion) takeover of the Canadian oil producer by Alfa SAB de CV and Harbour Energy Ltd.
O’Hara Administration, speaking for a group of shareholders holding about 20 percent of Pacific Rubiales shares, said on Thursday it had filed a proxy circular and letter urging other minority investors to vote against the deal.
The group said it was not attempting to unseat the Pacific Rubiales board at this time.
Pacific Rubiales responded in an emailed statement that it will seek to disqualify some 21.3 million shares, or 6.74 percent of all common shares, held by O’Hara, on the basis that they were acquired in “contravention of applicable Canadian securities laws.”
The Toronto-based company also noted that no other bidders have come forward to counter to C$6.50 per share offer from Mexican conglomerate Alfa and Harbour Energy, a joint venture between Asia’s Noble Group Ltd and U.S. private equity firm EIG Global Energy Partners.
That prompted a swift response from O’Hara, which has long opposed the deal it says undervalues the company and “incentivizes” management at the expense of minority shareholders.
“This is a desperate move as the company sees a wave of shareholder opposition building against the offer,” said O’Hara spokesman Jeff Shaffer in an email.
Pacific Rubiales has said the all-cash deal provides certainty and liquidity in a period of volatility for the oil market and that management “negotiated the offer with a view as to maximizing value for all shareholders.”
Shares of Pacific Rubiales, which is the second-biggest oil producer in Colombia, closed up 1.81 percent at C$5.61 on the Toronto Stock Exchange.
The offer from Alfa and Harbour Energy came during difficult times for Pacific Rubiales, whose shares have plunged 70 percent over the last year as crude prices fell and the company struggled under its hefty debt-load.
The stock jumped more than 25 percent after the takeover was announced but is still a fraction of its 52-week high of C$23.79 reached a year ago.
Besides O’Hara, the group includes IPC Investments Corp; Telmaven Overseas Inc; Volbor Trading Ltd; Memphis Investment Limited; Agency Partner Corp; Orlando Alvarado; Fundacion Nemone; and the Adar Macro Fund.
$1 = 1.2224 Canadian dollars Reporting by Julie Gordon; Editing by Lisa Von Ahn, Richard Chang and Bernard Orr