Wavefield shareholders vote to postpone 1 bln usd merger with TGS-NOPEC

Wavefield shareholders vote to postpone 1 bln usd merger with TGS-NOPEC

	Published : Tue, 20 Nov 2007 08:51 By : Agencies Print this Story

OSLO (Thomson Financial) - Norwegian seismic group Wavefield Inseis ASA said shareholders at an extraordinary general meeting approved postponing the company's planned 1 bln usd merger with fellow Norwegian group TGS-Nopec Geophysical.

Wavefield said shareholders at the meeting, held late on Monday, had voted in an overwhelming majority for the postponement with 69.8 mln shares voting for the resolution and 15.8 mln against.

'The board of directors of Wavefield Inseis is hereby instructed to prevent the completion of the merger,' the minutes of the meeting, which the company released to the Oslo Bors, said.

Wavefield said that if necessary the board had been instructed to seek a preliminary injunction in order to prevent the merger from being registered.

TGS-NOPEC, which had warned of financial consequences to it if the merger were blocked, said that there was no legal basis for a delay in the merger.

'TGS is not in a position to consider a revision to the terms of the existing agreement,' the company said in a statement.

The conditions for a legal battle have now emerged. TGS had warned previously that if the merger is blocked it would take legal advice.

'TGS-NOPEC is reviewing its full range of legal alternatives and its rights under Norwegian law,' the company said on Tuesday.

On Monday Wavefield's board said it would recommend the postponement after it had not received a report examining the causes for a shortfall in TGS's third-quarter revenues which had had a 'significant negative effect' on Wavefield's share price.

TGS, meanwhile, released a report prepared by PriceWaterhouseCoopers which it said was intended to address its third quarter revenue shortfall and the extent to which TGS could have been aware of the shortfall at the time of the EGM to approve the merger.

It said the report's findings and conclusions supported the facts that TGS performed all its obligations in accordance with its high corporate governance standards.

On Oct 25, TGS a reported a third-quarter pretax profit of 50.0 mln usd, down from 57.1 mln last year and below the 55 mln usd consensus forecast. The figure was hurt by productivity issues on two of its new 3D vessels, but the firm said it believed the market outlook was have ry strong'.

The announcement of the merger in July was widely greeted by enthusiasm, with analysts saying the two groups were highly complementary.

patrick.mcloughlin@thomson.com

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