Rebel shareholder group resorts to tears and harassment but MEC still wins out
Mining & Resources
A group of shareholders angling for control of gas investor MEC Resources worked overtime to convince shareholders to vote their way, but still lost out to the current board.
MEC shareholders said they had been “harassed” in the lead up to Tuesday’s spill meeting.
An extraordinary meeting was held in Sydney yesterday so shareholders could vote on the replacement of the current directors with three nominees.
But MEC was the victor with 61 per cent of shareholder votes cast in favour of keeping the current directors.
One shareholder told Stockhead he received over 40 calls, multiple text and voice mail messages, numerous letters, and representatives even showed up at his house and a friend’s house all in the name of convincing him to change his vote.
One representative of the group even resorted to tears, according to the shareholder – who did not want to be named.
“She was nearly in tears by the sound of it … and said no you’ve got to change your vote,” he explained.
“They were prepared to send a taxi to pick me up and take me probably 70km to sign this bit of paper they wanted. They were not going to take no for an answer. They were after my vote badly.”
But the shareholder told Stockhead that he would not change his vote.
The group put forward Peter Richard for the role of chairman along with Thomas Fontaine and Albert Grancini.
This is the fourth board spill attempt by the same group in the past 18 months, according to MEC.
The company again said the trio are linked with former boss David Breeze, who was let go in November 2016.
“Mr David Breeze isn’t publicly declaring his association with the so called ‘shareholder interest group’ that has called for this particular meeting, though shareholders can be in no doubt about his affiliation with these people,” acting chairman Matthew Battrick said at the spill meeting.
He added that MEC had been provided with “damning evidence” that Mr Breeze is behind this latest attempt to spill the board, including funding the unauthorised mailouts by the group.
But Mr Breeze, who has an 11.5 per cent stake in MEC, has continually maintained to Stockhead that he is not associated with the independent shareholder group.
The group is said to be unhappy with a recent farm-in deal between Asset Energy and RL Energy.
Under the deal, RL Energy can earn up to a 60 per cent stake in Advent’s main project, PEP11 – an offshore gas exploration project in the Sydney Basin, by spending up to $4 million.
MEC holds an interest in PEP11 through 85 per cent titleholder Asset Energy, a wholly owned subsidiary of Advent Energy – which MEC has a 50 per cent interest in.
A source who did not want to be named told Stockhead that the shareholder group had been saying the deal gives RL Energy the opportunity to take control of MEC, and that MEC had to pay back the money to RL Energy if a gas discovery was made.
However, MEC says the deal is being done at a project level and not an equity level, and no money will have to be paid back to RL Energy.
An independent expert last month deemed the transaction to be “fair and reasonable”.
The deal will be put to a shareholder vote at the end of the month.