By Ben Dutton
Thursday 12th October 2000
|Text too small?|
Commission Chair John Belgrave said that the Commission was concerned about Shell acquiring or strengthening dominance in all three of the relevant markets.
These "relevant" markets are current gas production, gas production after 2009, and the production of liquefied petroleum gas (LPG).
"In summary, the Commission is not satisfied that Shell would not acquire or strengthen dominance in the three relevant markets, and we cannot give a clearance," Mr Belgrave said.
Replying to the Commission's announcement, Fletcher Challenge CEO Michael Andrews said "until the Commission's full decision is released next week and we understand details of its concerns and Shell's response, we are unable to make any further comment."
Investors in Australia, where Fletcher Energy trades under the symbol FLCES certainly made a comment after hearing the news - Energy was slammed down to AUD$5.68.1 - a massive drop of almost 20%.
Many analysts thought that by announcing its restructuring plans before the Commerce Commission released its findings, Fletcher Challenge was confident clearance for the Energy acquisition would be given.
Now the conglomerate's plans have been thrown into disarray. Chairman of Fletcher Challenge, Dr Roderick Deane, has talked of a second option should Shell not be allowed to acquire Energy - exactly what this option is though, investors will have to wait and see.
One thing is for sure following this decision by the Commerce Commission - the road to riches for Energy shareholders will not be travelled down quite as easily as many first thought.
NOTE: please be advised to read full articles from Business Desk Website, you will have to pay a subscription fee on their website.
No comments yet
Fletcher vote still on
Legal action still possible in Fletcher Challenge insider case
Shell sweetens Commerce application for FEG
Deane rallies the troops at Fletcher AGM
More time please says Commerce Commission
Shell applies for Fletcher Energy again
Fletcher sells NZR stake for $34 million
Shell wants to work it out
Fletcher hopeful FEG sale still on
D-Day for Fletcher Challenge - market slams Building & Forests