TGS announces more emphatic rejection of merger

Seismic explorer TGS-NOPEC on Wednesday revised the numbers of the vote at its special shareholders meeting the previous day – showing an even more emphatic rejection of the planned merger with Norwegian sector rival Wavefield-Inseis.

The proposed merger last year between the two listed groups fell apart when TGS issued a profit warning that hit the value of the all-share deal – initially worth over $1 billion – and Wavefield’s board accused TGS of knowing about the warning while negotiating the deal terms.

Most analysts had welcomed the deal when announced as being highly beneficial to both companies, with widespread synergy benefits.

TGS said in a statement said it was correcting the vote results, released after the votes cast yesterday.

“Although the conclusion of the votes cast yesterday was correct, unfortunately, the number of votes voting for and against…were quoted wrongly,” it said.

It said the numer of shares voting for the board’s proposal to drop the demand for implementation of the merger with Wavefield in arbitration proceedings totalled 31.465 million shares – or 92 percent of the vote. It added that 2.875 shares, or 8 percent, voted against the resolution while only 4,400 shares abstained.

“As said yesterday, this means that TGS will terminate the merger plan with Wavefield and concentrate on the claim for compensation in arbitration,” TGS said.

The new figures compare with the announcement of the result yesterday.

It announced that a total of 25.782 million shares voted in favour of a proposal from directors to drop the merger, and 8.557 m shareholders voted against. Another 4.40 m shareholders abstained from voting on the directors’ proposal.

“This means that TGS will terminate the merger plan with Wavefield and
concentrate on the claim for compensation in Arbitration,” TGS said in Tuesday’s statement.

TGS and Wavefield first announced they would combine at the end of August last year but later TGS issued its third quarter results in October which indicated a fall in revenue. After that, Wavefield began calling for a change in the revenue terms, specifically seeking to change the share exchange ratio originally agreed between the two companies.