Neon Energy Updates on Evoworld's Latest Moves Relating to the Company
Australia's Neon Energy Limited reported Wednesday that further to the announcement of Nov. 13, the firm has received notice from Evoworld Corporation Pty Ltd (Evoworld), advising the former of its current intention to call and arrange a general meeting of Neon Energy, pursuant to section 249F of the Corporations Act, Jan. 14, 2015.
The Board of Neon Energy understands that Evoworld intends to send a Notice of Meeting to Neon Energy shareholders in due course. As previously announced, Evoworld has indicated that it will put resolutions to the meeting on various matters, including the proposed merger with MEO Australia Limited (MEO), the removal of the existing Directors, and the appointment of Evoworld nominees Timothy Kestell, Peter Pynes and Ross Williams as Directors of Neon Energy. Regrettably, however, to date Evoworld has not provided any further details of its proposed resolutions.
This latest move from Evoworld follows the defeat of all of Evoworld’s resolutions at the Company general meetings held Nov. 12. At those meetings Neon Energy shareholders voted comprehensively against Evoworld’s proportional takeover offer, and against Evoworld’s resolutions to replace the current Directors of Neon Energy with their own nominees.
While the vote at the Requisitioned Meeting to consider resolutions to replace the Board was relatively close in terms of votes cast, a more detailed review of the results shows the comprehensive support for Neon Energy’s current Board and strategy:
- A total of 845 shareholders voted against Evoworld’s resolutions to replace the Company’s Board with its own nominees, compared with approximately 70 shareholders who voted for
- Some 54 percent of Neon Energy shares were voted at the meeting requisitioned by Evoworld. In light of Evoworld holding 19.99 percent of the Company’s shares, the Board considers that this significant turnout reflects shareholder concerns regarding the track record of Evoworld and its directors, and the lack of a clearly stated strategy from Evoworld to grow shareholder value
- Excepting the votes cast by Evoworld, approximately 153 million shares were voted against the attempt by Evoworld to take control of Neon Energy’s Board, compared to approximately 34 million voted in favour. Of these 34 million, over 20 million shares were voted by shareholders who entered Neon’s register after Evoworld’s takeover offer was instigated
Based upon these results the Board of Neon Energy believes it has received a clear mandate, from a large proportion of its shareholders, to proceed with its recommended growth strategy; the proposed merger with MEO Australia Limited (MEO). Despite this fact, Neon Energy has become aware that Evoworld has recently written to Neon Energy shareholders. In its letter entitled “A Call to Arms to all Neon Energy Shareholders” Evoworld seeks to undermine the
proposed merger with MEO, with messages that the Board considers misleading without clarification, including:
Evoworld question how the transaction can be a “merger of equals” citing MEO’s cash balance of $9.99 million (AUD 11.7 million) relative to Neon’s $21.61 million (AUD 25.3 million).
Evoworld fails to acknowledge the fact that MEO brings a substantial asset and new venture opportunity portfolio, to be funded with Neon Energy’s cash and creating a mutually beneficial arrangement that justifies the equal valuation placed upon the two companies. The merger of equals is based upon what both companies bring to the merged group, not only their cash balances.
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