NAB puts $1.5 billion behind Peak

Friday 2nd March 2001

By Nick Stride

Market sources say National Australia Bank is the principal debt funder behind the Peak Petroleum bid for Fletcher Energy.

Bill Birnie of FR Partners, one of Peak's backers, would not identify the bank but said "a major Australasian bank" had written to the FCL board to confirm $US650 million ($1.5 billion) would be available to Peak by March 22.

"Our bankers believe the consortium is in no way overleveraged," Mr Birnie said.

Peak Petroleum is preparing for a "beauty contest" battle as it vies with the Fletcher Challenge/Shell camp for the attention of Fletcher Energy's institutional shareholders.

Peak will have to persuade holders of at least 25.1% of Energy's shares to vote against the Fletcher-recommended sale of Energy to Shell at Tuesday's special meeting if it doesn't win its court action.

As The National Business Review went to press Peak's lawyers were preparing to ask the High Court today to force open Energy's books to due diligence and to delay Tuesday's crucial shareholders' vote on a sale to Shell until March 23.

The issues are complex and the court is not expected to rule soon - it may not even have an answer by Tuesday.

Peak claims a raft of Energy's local and institutional holders have agreed to support its bid both with their votes and with equity backing.

Institutions not aligned with Peak, and smaller shareholders, face a dilemma. If they vote against the resolution, they risk losing out altogether if Shell walks and Peak's deal falls over.

But a "no" vote could also prompt the deep-pocketed Shell to lift its bid price above Peak's.

Peak's bid

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