Fight for Pacific becomes bitter

The two-way battle to acquire Pacific Energy has turned hostile, after original bidder, QIC, lodged an application with the Takeovers Panel today.

In July, QIC made a $422 million offer for Pacific, which appeared likely to go ahead until the remote power station operator announced on Tuesday it had entered into a new agreement with a consortium comprised of fund manager Infrastructure Capital Group and Canadian pension fund OPTrust for $470 million.

Today, QIC told the Takeovers Panel that it believed the new agreement was a clear and wilful breach of its scheme implementation deed with Pacific by denying it the benefit of a matching right.

QIC said the new agreement included a $2.5 million break fee, which would reduce the value of the company’s assets if the company exercised its matching right.

Additionally, it claimed the agreement was inconsistent with Pacific’s publicly disclosed intentions in relation to how it would conduct its affairs in the event of a competition proposal.

QIC has until September 17 to match the increased price, but in its submission to the panel it also revealed it presented a matching proposal to Pacific yesterday.

QIC requested interim orders from the Takeovers Panel that the new agreement be suspended, and wants Pacific to be prevented from paying a break fee to the consortium.

On Tuesday, Kenneth Hall, who was the founder of Pacific subsidiary Kalgoorlie Power Systems, said he intended to vote in favour of QIC’s takeover scheme in respect of his 48.7 per cent shareholding if it matched the increased price.

Pacific Energy has not yet responded to application.

Shares in Pacific are in a trading halt at $1.10 each.