While the deal has the support of Nautical’s board, only 8.89 per cent of shareowners are irrevocably committed to vote for the scheme. Another 18.36 per cent have expressed an intention to vote for it, but could still have their heads turned by another bidder. The Aim-listed firm has just three shareholders that declare holdings of over three per cent, and these only total 23.75 per cent of votes between them, so there are lots of small shareholders to win over before the deal is sealed.
This uncertainty is a sign of the energy in the North Sea oil and gas companies at the moment, where promising but costly prospects like the Catcher field are helping to drive consolidation among a large number of small players. Cairn itself already acquired Agora Oil & Gas for £280m this April, and between the two would own a 30 per cent stake in Catcher, which is expect to cost £1bn-£1.8bn to bring onstream.
But that’s not to say that the exploration and production company is refocusing on the North Sea. It hopes to use medium-term revenues from Catcher and similar discoveries, where first oil is planned for as soon as 2015, to fund its operating focus on frontier basin explorations in Greenland, Lebanon and Cyprus. It just has to hope that Nautical’s owners think this is their best offer.
Marc Sidwell is City A.M.’s managing editor.