LONDON (Alliance News) - New World Oil and Gas PLC shares rose on Thursday after it clarified the holding that Judith Williams has in the company, which being over the threshold under takeover rules may lead to her being forced to make an offer to takeover the company.
New World shares were up 7.7% to 0.307 pence per share early Thursday afternoon.
Judith Williams, who caused a stir after purchasing shares in New World last week due to confusion over what size stake in the company she had bought, was confirmed to hold over 250.3 million New World shares, which equates to a 35.63% stake of the company's existing issued shares.
The stake held by Williams still could change as she has not formally received all the shares purchased. Questions also remain about what percentage those shares would represent, as the placing is still conditional and the potential increase in issued share capital would reduce that percentage. If the increase takes place, Williams' stake would fall to about 10%.
Under UK takeover rules, if a person owns 30% or more of the shares in a company, in most circumstances they must make a cash offer to all other shareholders.
On Monday, New World said that due to the level of interest in the company's shares since it announced a placing in April, it "feels appropriate" to allow shareholders to purchase shares under the open offer at the same price as the placing of 0.055 pence. Terms of the open offer are expected to be released "in due course".
The company conducted a conditional placing in April of over 2.72 billion new shares at 0.055 pence to raise GBP1.5 million with existing and new investors, which is subject to shareholder approval at an extraordinary general meeting on May 19.
However, after the proposed placing was announced, New World said Judith Williams, whose relationship with the company has not been clarified, had purchased over 342.3 million shares in the company which was stated as representing a 10% stake in the enlarged issued share capital.
On May 5, New World said it was looking into William's acquisition of shares, including whether there were any regulatory implications and what her intention was. The company said it was unsure what stake Williams held as it was unclear whether it would be based on the original share capital or the enlarged issued share capital following the placing.
That caused a high volume of trading in the company's shares and a flurry of internet commentary.
That was followed by another statement on Monday that said Judith Williams would be obliged to extend an offer to the company's shareholders in the event that she receives delivery of shares which carry 30% or more of the company's voting rights. The breach of that threshold has now been confirmed.
On Wednesday, the Mail Online said the share purchase by Judith Williams was actually by her son, an oil investor called Christopher Williams, who thought he was only purchasing a 10% stake in the company before realising that his mother may be required to launch a full offer for the company.
Christopher Williams had purchased the shares for GBP250,000, according to the newspaper.
According to the Mail Online, the UK Takeover Panel said it decided that Judith Williams may be forced to bid for the remainder of the shares, which would cost between GBP1.5 million and GBP2.5 million, although it has also said she could sell the shares. That share sale would likely be at a loss.
On Tuesday, New World said it turned down what it described as a "purported" letter of requisition from Jon Rhodri Williams, Christopher Williams and Judith Mary Williams requisitioning a meeting, which was rejected by the company following legal advice.
No details of why the meeting was requisitioned were released, which rose further questions about the intention of the shareholders. The Williams family were claiming an aggregate holding of 342,328,669 ordinary shares in the company.
Fellow listed Metal Tiger PLC said on Tuesday that it has sold the majority of its stake in New World Oil to below 3% from 6.7% last Friday, and said it is evaluating its remaining stake in the company in light of the current circumstances.
A spokesman for the company Thursday reiterated that New World Oil is an "innocent" party which has simply gone to the market to raise money.
Attention will now turn to whether or not shareholders will approve the conditional placing on May 19, which will define what stake in the company Williams will hold. If the placing is rejected by shareholders, the company will have to rely on the open offer to raise cash, which Cornhill Capital, the placing agent, has agreed to underwrite for up to GBP1.5 million.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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