Phoenix shareholders threaten legal action to block Mercuria’s full takeover
Upstream oil and gas firm Phoenix Global Resources is being challenged by shareholders over the company’s decision to accept a full takeover offer from majority shareholder Mercuria.
J Stern & Co, a London and Swiss based investment house, has threatened legal action against the decision on behalf of a group of minority shareholders.
They argue that they waived rights as minority investors on the understanding that any full takeover deal from majority shareholder Mercuria would be valued at 33.5p a share, at least.
But last month Phoenix accepted an offer at 7.5p a share, which was formally approved at a company meeting yesterday.
Jerome Stern, the managing partner at the investment house, said the results of yesterday’s vote to delist Phoenix, re-register the company as a private company and adopt new articles, “substantially reduce minority shareholder protections” and “reflect a failure of good governance and regulation.”
“No single shareholder should be allowed to position themselves in such a way that enables them to take control of the assets and value of a business to their benefit alone, as appears to us to have taken place today,” Stern said.
“It further appears to us that Mercuria has used its influence, as the 84 per cent shareholder and sole provider of debt finance to Phoenix, to place the company in a challenging position,” Stern said.
Stern said that as a result of these actions, minority shareholders “have suffered significant financial loss,” and left the group with “no option but to seek legal action.”
Phoenix said yesterday that the company’s board is taking legal advice on the action, and believes the group’s claims are “without merit.”
Swiss-headquartered commodity trading firm Mercuria, who is also being threatened with legal action, was contacted for comment.