Nippon Oil to Weigh Its Stance on Teikoku-INPEX Merger: Chm
Posted on: Tuesday, 29 November 2005, 18:00 CST
Tokyo, Nov. 29 (Jiji Press)--Nippon Oil Corp. , the top shareholder of Teikoku Oil Co. , will carefully consider whether it should oppose Teikoku's planned business integration with INPEX Corp. at a shareholders' meeting in late January, Chairman Fumiaki Watari said Tuesday.
"The oil refiner and distributor plans to hold talks with Teikoku Oil on the matter up to the last minute," Watari said in an interview.
Watari, at the same time, expressed displeasure with the planned integration, saying that he is worried that the move will push down the value of Teikoku shares held by Nippon Oil, which has a 20.4 stake.
Teikoku Oil and INPEX, both of which are major Japanese crude oil and natural gas developers, announced early this month that they plan to merge their operations under a holding company in April 2006, aiming to become a leading player in resources development.
Watari expressed skepticism about the benefits of integrating two resources developers, noting that companies can boost their bargaining powers with oil-producing nations only when they combine resources development with refining and sales operations.
He also complained that Teikoku Oil shares are undervalued in the effective merger ratio of one INPEX share to 1.44 Teikoku shares.
Watari pointed out that the government, a major shareholder in INPEX, will continue to own golden shares, which give the holders veto power over crucial proposals, after the merger and stressed that the existence of golden shares limits the rights of other shareholders.END
Source: Jiji Press English News Service
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