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Fletcher vote still on

By Phil Boeyen, ShareChat Business News Editor

Wednesday 28th February 2001

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Fletcher Challenge says the special shareholders meeting due to take place next week to vote on the company's separation process will go ahead despite a new bid for Fletcher Energy (NZSE: FEG).

A group called Peak Petroleum yesterday revealed the details of a higher cash offer for Energy, and said it would be in a position to make an unconditional offer by March 23rd.

The group is backed by privately held energy company, Greymouth Petroleum Mining. Guiness Peat Group and a number of other investors also have an interest.

Fletcher chairman, Rod Deane, says under the terms of the Shell and Apache offer, Shell and Apache can terminate the offer if the transaction is not completed by March 23rd, and the companies have not extended that deadline.

He says the board's primary focus is ensuring all shareholders receive the best value possible from the sale of the Energy assets.

"In evaluating the Greymouth proposal, the Fletcher Challenge board is considering the fundamental issues of price, certainty and timing."

He says the cash component of the Greymouth proposal is 10% higher than Shell and Apache, while on the issue of certainty the Shell and Apache offer is firm and can be closed by March 23rd.

"The Greymouth proposal requires due diligence and the board therefore is unable to verify Greymouth's ability to complete a purchase of the Energy Division.

"The Greymouth proposal is not currently an offer capable of being accepted by the company or being voted on by shareholders."

Mr Deane says the timing around the proposal from Greymouth is also less certain than the Shell and Apache offer.

Fletcher Challenge says shareholders who have already voted are able to change their votes or proxy appointments up to 2pm on Sunday, 4 March.

It has also set up an 0800 shareholder helpline (0800 734 734) to provide voting information to shareholders.

Earlier today Fletcher Energy announced a record half-year profit of $308 million on the back of increases in both production and prices for oil and gas.

In its appeal to shareholders to consider its bid Peak Petroleum has highlighted that it will be a New Zealand company and keep assets in this country, but that tack has come under fire from Rod Deane.

"In making an assessment of value it is important that the facts be clearly understood and emotive statements such as the country of residence of each of the bidders be seen for what they are and put aside.

"That the physical assets of Fletcher Challenge Energy will remain in New Zealand is undisputed - who will own and manage those assets will be determined by whichever party can offer the current shareholders the best value."

FEG closed down 15 cents today at $9.05.

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