Bowleven braces for fight against activist fund

bowleven workers
Bowleven workers

Oil explorer Bowleven is braced to lose its fight for survival in the face of an onslaught from a rebel shareholder intent on overthrowing the board.

The feud has been brewing between the two for months and will come to a head on Tuesday as shareholders vote on the calls from Bowleven’s largest backer to replace the board and turn the oil explorer into a holding company.

Informed city sources say that based on the proxy votes cast before Friday’s deadline the board is unlikely to be able to fight off the challenge.

Crown Ocean Capital, a Monaco-based investment fund, has accused the board of being overpaid while bungling the management of its African oil assets and driving the share price down from over 350p in 2011 to 35p today.

The bitter boardroom battle echoes the hostile takeover of Irish oil company Petroceltic last year in which its majority shareholder, Worldview Capital, successfully ousted the board after wresting control of its debt.

“This situation is being watched very carefully,” said a city source active in the oil industry.

“The overthrow of the Petroceltic board has proved to the industry that these investors are not to be taken lightly. Crown Ocean has continued to take their stake higher and has taken the time to craft a logical argument against a poor history,” he added.

The board had hoped to see off the rebellion with a new deal to team up with its Aim-listed peer Victoria Oil and Gas to accelerate cash flow from its Bonomo project in Cameroon made public last week.

Under the terms Bowleven will give up 80pc of the project in exchange for quicker route to the domestic market which would pay as much as five times the price originally expected.

The fund responded by saying the deal "makes little or no sense for Bowleven shareholders" but nonetheless retaliated by paying a rich price, relative to the rest of its stake, to buy a further 4pc in the company from long-time investor Artemis.

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