As InterOil vote approaches, hedge funds make their moves

AN INDEPENDENT proxy voting advisory firm has urged shareholders to vote for ExxonMobil’s $US3.6 billion ($A4.77 billion) takeover of the Papua New Guinea-focused player today.
As InterOil vote approaches, hedge funds make their moves As InterOil vote approaches, hedge funds make their moves As InterOil vote approaches, hedge funds make their moves As InterOil vote approaches, hedge funds make their moves As InterOil vote approaches, hedge funds make their moves

InterOil announced yesterday that Institutional Shareholder Services recommended shareholders vote "for" the transaction with the US supermajor, with votes needing to be received in time for a special meeting on September 19.

Under the deal, InterOil shareholders will receive $US45 worth of ExxonMobil common shares for each share of stock they hold, which represents a 42.2% premium to the junior's closing price on May 19.

InterOil is also spruiking a potential direct cash payment through the contingent resource payment, based on the value upside from the Elk-Antelope resource certification.

Under this deal, shareholders will receive about $7.07 cash for every share they hold for each incremental trillion cubic foot-equivalent of PRL15 2C resource above 6.2Tcfe, up to a maximum of 10Tcfe of certified resource.

With InterOil founder Peter Mulacek, who owns 5.35% of the junior, determined to derail the deal by making explosive accusations of insider trading against the takeover target's board and management, the company is pleading with shareholders to make "every vote count".

Mulacek believes the ExxonMobil CRP is based only on a single resource estimate performed after Antelope 7 and before any gas or LNG is produced, which he says will not fully reflect the true resource size.

He said the ExxonMobil CRP should provide for the resource to be recertified after production was underway, and for supplemental payments based on the recertification, in each case back-to-back with similar recertifications and payments under Total's existing agreement with InterOil.

Hedge fund activity

Amid all this, hedge funds have been ditching and buying up swathes of InterOil Stock over the past quarter.

Cayman Island-held Key Group Holdings reduced its stake in InterOil by 31.12% during the second quarter. It now holds just over 1 million shares in the PNG player, which makes up about 4.67% of the investment management company's portfolio.

Norges Bank also cut its InterOil stake, selling 31.08% in Q2, leaving it with about $12 million worth of shares.

Meanwhile, Clovis Capital Management boosted its stake in InterOil in Q2, adding some 307,000 shares which make up roughly 10.57% of the firm's portfolio.

Geneva Advisors sold out all of its stake in InterOil, which was valued at $359,341.

Hap Trading boosted its interest in the PNG player by adding 11,726 shares and now holds about $1.9 million worth, as did Vanguard, which added 2400 shares and holds $446,082 worth.

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