The Dublin-based exploration firm faces a shareholder vote next week based on resolutions brought by leading independent shareholder, the Swiss investment firm Worldview Capital Management.
Worldview, which owns nearly 30% of the Irish firm, is unhappy with how the board is running Petroceltic and wants to double — to four — the number of its representatives on the board and remove chief executive Brian O’Cathain.
Petroceltic has already accused Worldview of trying to gain control of the company without having to pay a fair price, adding that it lacks the skills to run such a business and has “a serious misunderstanding” of the company’s assets.
Mr O’Cathain recently said the board is confident, but not complacent, regarding next week’s vote, adding it has already amassed the backing of a number of institutional and retail investors.
That support was added to yesterday, with ISS Governance Services and Glass Lewis recommending that subscribers should vote against Worldview’s resolutions.
“The support of these groups should bode well for the board of Petroceltic,” said Gerry Hennigan, exploration analyst at Goodbody Stockbrokers.
“However, based on evidence to date, whatever the outcome of the EGM, the discord between management and its largest shareholder is likely to continue and, ultimately, have a bearing on the strategic direction of the company.”
However, yesterday’s support was tiered. While ISS and Glass Lewis are against both Worldview resolutions, a third firm, PIRC, is calling on investors to abstain on the vote on Mr O’Cathain’s position but oppose Worldview’s call for more board representation.
Regarding the counter-resolution being put forward by Petroceltic — it is calling for two other independent nominees to be appointed to the board; Nicholas Gay and Neeve Billis — both ISS and PIRC are recommending votes in favour, while Glass Lewis is recommending shareholders to vote for Mr Gay but against Mr Billis.
One of Worldview’s complaints was that the Petroceltic board was to blame for the failure of the firm to be bought out by Dragon Oil last year.
However, on the back of its own set of annual results, yesterday, Dragon’s management said it still likes the Petroceltic board and its assets and has not ruled out making another bid for the Dublin company.
It faces a 12-month block on making another approach, but that could be lowered if Petroceltic allow.