Reabold Resources has set a date for its latest showdown vote with a group of shareholders, in what it described as an ‘opportunistic’ attempt to oust its leadership in the wake of a major deal with Shell.
Reabold (AIM: RBD) published a circular to shareholders on Wednesday, setting a date for 10 January 2023 in London for shareholders to vote new proposals to remove its board of directors.
A group led by Kamran Sattar of Portillion Capital – who has made numerous takeover attempts of the company in the past – launched the latest bid in early November, claiming his cohort had “lost all confidence” in the company’s board. The message was sent on behalf of 13 shareholders representing around 7.84% of the company’s share capital.
Reabold dismissed the initial requisition notice, pointing to a series of “material deficiencies” in due process, though it confirmed today that a formal procedure to consider the resolutions has now been launched.
In a statement it advised shareholders to vote against all proposals, amid a series of excoriating criticisms levelled at the group and Mr Sattar.
In particular, it argues that the motives of the dissenting shareholders “cannot be trusted” and claims the board has multiple examples of Kamran Sattar “attempting to extract value from shareholders for self-serving gains.”
Mr Sattar in turn accused the company’s leadership of being “untrustworthy”, noting that the investor group had written to the board over its decision to further invest in the Colle Sant prospect in Italy. The 7 December letter says the shareholder group believes the gas project is “overvalued” and is “unlikely to succeed” in production aims.
It urged the board to commit no further funds to the scheme until an audit of the acquisition had been conducted.
‘Yet another proxy battle’
In its statement on Wednesday, Reabold criticised the group’s “unprofessional” conduct, adding that it “condemns the decision to force the company to commit further valuable time and resources to yet another proxy battle.”
“It is the board’s view that the requisitioned general meeting is an opportunistic attempt to, once again, seize control of the company and its assets without paying a control premium to all shareholders.
“The board believes the motives of the requisitioning shareholders cannot be trusted and that the timing of the requisition letter is not coincidental; it is in fact opportunistic.”
Reabold argues that an earlier takeover attempt coincided with the first tranche payment due from Shell for the sale of Corallian Energy in late 2022.
It notes that the second ouster attempt coincides with a subsequent £5.2m received from Shell on 5 December 2023 and a further £4.4m expected in the coming months.
With these deals underway it alleges the group is attempting to take control of the “well-funded” company.
“Of significant concern to the company is the fact that Kamran Sattar and Portillion have invested approximately £2.7 million and are interested in 40% of Daybreak Oil & Gas, with Reabold holding a 42% interest,” it added.
Washington-headquartered Daybreak also acquired Reabold’s Californian business in 2022.
“Given Mr. Sattar’s significant interest in Daybreak, the Board fears that Mr Sattar has a strong motive to take control of Reabold in order to prioritise the company’s cash resources towards Daybreak ahead of investments in West Newton and Colle Santo, and making capital returns to Shareholders.”
It said the next year would see the board pursue drilling at West Newton and development of Colle Santo in Italy.
“Replacing the board of Reabold with proposed directors that do not possess the same level of experience and understanding could significantly derail the development of these assets at a crucial time for the company and its shareholders,” the statement concluded.
‘Grave concerns’ from Portillion
In an emailed statement, Mr Sattar said his group was “astounded” by the company’s accusations, and affirmed Portillion had complied with “all its regulatory and compliance obligations including those of the takeover panel”.
“We find this rather laughable when we question why the management have decided to further invest into Colle Santo when we wrote the board a letter on the 7/12/23 stating our very significant concerns and how this asset has lead to the demise of two publicly traded companies previously as well as shares being transferred directly to directors of LNE energy rather than the company.”
The note further questioned motives of the company board and directors, and said the group was “gravely concerned” around the timing of share purchases and “poor decision making and poor governance”.
The letter also criticised “extortionate wages” paid to the firm’s two co-CEOs when a company such as Reabold “should have one competent CEO.”
Mr Sattar said the group would be providing a full business plan and response via its website.
Back on buybacks
Meanwhile, in a separate announcement Reabold confirmed it had now received £5.2 million as part of a deferred consideration from Shell following the sale of its stakes in the Victory asset.
Accordingly, it said it would now recommence its share buyback programme, returning up to £593,846 to shareholders, and concluding the £750,000 drive iniitiated earlier this year.
It said the purchases are expected to continue until its next general meeting on 10 January 2024, at which point the programme would be reviewed.
Updated at 1515 to reflect comments from Kamran Sattar and the Reabold Requisition.