Wednesday 06 April 2016 11:16 am

Petroceltic share price dives as Worldview appears set to win long-running feud

Activist investor Worldview Capital appears to have won its long-running feud with Irish oil explorer Petroceltic.

Worldview, Petroceltic's largest shareholder with 29.6 percent, has made repeated overtures over the last 18 months for changes to the board and the strategic direction of the group.

In February, Worldview made an offer of 3p per share, an 83 per cent discount to the stock's previous closing price. The Dublin-based group swiftly rejected the bid, saying it undervalued the company. Worldview applied further pressure in March, by snapping up 70 per cent of the group’s $232.5m (165m) bank debt.

But today Petroceltic seemed to finally admit defeat in recommending its shareholders accept the takeover offer. A court examinership was due to commence on Monday and will still go ahead despite the board recommendations.

"The board of Petroceltic, having regard …specifically (to) the likely outcomes for Shareholders on conclusion of the examinership process … recommends that shareholders accept the Offer as soon as possible," it said in a statement.

The board added that it was "far more likely" that any proposals put forward under the examinership process would result in the restructuring of outstanding liabilities and "provide for all existing ordinary shares ..to be cancelled for no consideration."

The sale to Worldview cannot be completed until the examinership has finished, a process that can take up to 100 days.

Petroceltic, which operates in Algeria, Egypt, the Black Sea and the Kurdistan region of Iraq, has been struggling with crude oil prices falling to multi-year lows.

The companies have been locked in a long-running over Petroceltic's governance. Worldview had lobbied for chief executive Brian O’Cathain removed from the board, and wanted shareholders to appoint different directors to those backed by the Irish firm.