InterOil Says Protest Against Board Won't Impact Takeover Vote

Reuters

MELBOURNE, June 15 (Reuters) - Takeover target InterOil Corp said on Wednesday a protest vote against its directors at a shareholders' meeting will have no bearing on an upcoming vote on a $2.2 billion bid for it by Australia's Oil Search .

While InterOil's board nominees were all re-elected at the annual meeting in New York on Tuesday, they won support from as few as 72 percent of the shares represented, amid shareholder anger over Chief Executive Michael Hession's pay package.

InterOil said that vote was not an indicator of how shareholders may lean on July 28 on Oil Search's bid for InterOil and the plan to split its assets with French giant Total SA.

"It's a little bit early to translate that result into a vote for the Oil Search deal," InterOil spokesman Rob Millhouse said.

The InterOil takeover requires the approval of two-thirds of InterOil shares voted.

People close to Oil Search played down the protest vote against InterOil's board, saying, if anything, shareholders who were opposed to CEO Michael Hession would probably prefer Oil Search's management.

InterOil's founder and former chief executive Phil Mulacek, who ran a campaign to oust the board, did not attend the meeting in New York to vote on his own nominees. He told Reuters last week the board question was moot now that InterOil was a takeover target.

Oil Search has offered 8.05 of its own shares for every InterOil share, valuing them at $40, plus an extra payment to be paid in 2017 based on the size of InterOil's key asset, the Elk-Antelope gas field in Papua New Guinea. InterOil last traded at $42.04.

The field's size will be certified following appraisal drilling this year, but Mulacek says the bid undervalues InterOil because the true size will not be understood until the field has been producing for a few years, long after 2017.

(Reporting by Sonali Paul; Editing by Muralikumar Anantharaman)

Copyright 2016 Thomson Reuters. Click for Restrictions.

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