court update from IOC

[jft310]

InterOil Corporation (NYSE: IOC, POMSox: IOC) today provided an update on the court approval process regarding the pending transaction with Exxon Mobil Corporation (NYSE: XOM). Today, the Court of Appeal of the Yukon has accommodated an expedited hearing with respect to the appeal lodged by Phil Mulacek, which is scheduled to be heard on October 31, 2016.

In addition, the Court of Appeal of Yukon granted a stay of the Supreme Court of Yukon’s order approving the transaction, pending the hearing.

InterOil continues to believe that the transaction represents compelling value for all InterOil shareholders and will vigorously oppose Mr Mulacek's appeal. InterOil and ExxonMobil intend to close the transaction promptly following receipt of a favorable resolution.

As previously announced, the Supreme Court of Yukon approved the transaction on October 7, 2016, finding that it is fair and reasonable.

[Stavros]

This gives XOM 11 more days to improve the offer in a way that will persuade the Appeals Judge to rule in their favor. Perhaps Phil might even agree to an improved deal?

An improvement to the current offer would not require another vote by shareholders.

To my opinion XOM will be taking a big risk if they decide to stand pat and defend the current lowball deal at $45 per share with an unknown (but capped) CR(a)P.

I think it's possible to see the $45 raised to $65 and the CR(a)P starting at 9 Tcfe with no cap.

[jft310]

Granting a stay of the initial decision is a big deal . I hope Stavros estimates are close but I doubt if they are realistic when dealing with an Exxon type . We shall see.

[Martinistocks]

I would be stunned if the XOM does anything before the decision and let's hope you are right. I like being stunned.

[Kaliboo]

This gives XOM 11 more days to improve the offer in a way that will persuade the Appeals Judge to rule in their favor. Perhaps Phil might even agree to an improved deal? An improvement to the current offer would not require another vote by shareholders. To my opinion XOM will be taking a big risk if they decide to stand pat and defend the current lowball deal at $45 per share with an unknown (but capped) CR(a)P. I think it's possible to see the $45 raised to $65 and the CR(a)P starting at 9 Tcfe with no cap.

Yes this also gives more time for XOM to fall and/or rise to affect the number of shares we get.  Let's hope it works to our benefit.  We still don't have an end date or no what the ending will be.  It seems the appeal court has no option but to stay the ruling, otherwise a gigantic mess would be created if the ruling favors PM.  I agree on the XOM matter.  They won't do anything until after the court rules.  And just what is PM asking the court to do?  Obviously the outcome has the potential to affect the entire deal and all shareholders.  If it was only going to affect PMs dissent and how much money he gets, then they would have approved the deal while PM appeals his cut.

Good luck to all.

[Getitrt2]

I am with Martini in hoping I will be stunned, because I do not believe Exxon will change anything before the hearing and believe the Appeals Court will deny the appeal. Am I now fully converted to a cynic?!

I believe they planned to spud Antelope 7 this month. I wonder whether they will now delay that? Hopefully not.

[Northoil]

I am with Martini in hoping I will be stunned, because I do not believe Exxon will change anything before the hearing and believe the Appeals Court will deny the appeal. Am I now fully converted to a cynic?! I believe they planned to spud Antelope 7 this month. I wonder whether they will now delay that? Hopefully not.

__________________________________________________________________________________________________________

I am assuming PM's case was not about the sale price itself, as that would be determined in the "dissent" phase; rather about the procedure and shenannigans leading up to the vote, such as a "fair" evaluation by consultants who have a financial interest and a CEO with similar motivation.  I.e., the sale shuld be nullified and the deal restructured with open information to the shareholders.

That said, if the appeal goes forward, you must stay the sale.  Otherwise, the milk is already spilt and the appeal is moot.

As to the appeal, I'm under the belief that appeals are heard on the legal issues arising in the case, not the deal itself.  (If that's not true, somebody say so).  Therefore, unless the Yukon Supreme Court judge screwed up - and he is presumably are knowledgeable at that level-  the appeal will probably be denied in short order.  The more so because of the dissent process.

Exxon will never, ever, sweeten the deal before all the rulings are in.

I don't think they will in the dissent phase, either. They will fight tooth and nail first.  The legal fees are a relative pittance.  Do the math - how many dissent shares are there?  PM claims to represent 7.6%- 4 million shares - so is a total of 10% dissenting reasonable? That's 5 million shares.  You want $65? $75?  That's $100-150 million more to Exxon.  That's a lot of lawyers.  If Exxon's cost of capital is 10%, the time-value alone is $10-15 million a year.  That's still a lot of lawyers.  Lawyers don't make $1000/hr, especially in the Yukon.  At $2000/day/lawyer, $10-15 million/year would cover 20 lawyers full-time (unlikely)  forever.

[Putncalls]

Anybody know the basis for the appeal?

[sageo]

This gives XOM 11 more days to improve the offer in a way that will persuade the Appeals Judge to rule in their favor. Perhaps Phil might even agree to an improved deal? An improvement to the current offer would not require another vote by shareholders. To my opinion XOM will be taking a big risk if they decide to stand pat and defend the current lowball deal at $45 per share with an unknown (but capped) CR(a)P. I think it's possible to see the $45 raised to $65 and the CR(a)P starting at 9 Tcfe with no cap.

Stavros - Good am to you .  Another "ain't gonna' happen,but fun to think about"scenario ." border="0" class="smilie" src="http://shareholdersunite.com/mybb/images/smilies/biggrin.gif" />  Exxon says okay to your $65 and $9 ,and then spuds the A7 And the A4-A at the same time ! Would their tcfs JUMP or what ....that would really be cool ! Then we would be much closer to the true size of this huge reservoir. Have a nice day....as the waiting stretches out .

[2126]

Anybody know the basis for the appeal?

Best guess as the basis for appeal is: that the trial court erred in finding that the Arrangement was 'fair and reasonable' given that the 'fairness opinion'' by MS was, in the judge's own words "remarkably deficient", was "devoid of facts and analysis", "provided no real assistance in evaluating" the Exxon offer, and "does not meet the standard of good corporate governance." The court also states clearly that "The Fairness Opinion obtained by the Board was deficient and indicative of a failure to discharge its fiduciary obligations."

The legal question, then, is whether the trial court gave sufficient weight to the obvious failings of the MS fairness opinion in its judgement that, overall, the deal was "fair and reasonable." The appeals court could well decide that the trial court did not give the MS opinion sufficient weight and, thus, overrule the trial court's decision that the deal was 'fair and reasonable." Appellate courts do not do so lightly, but, in this case, and in light of the ammunition that the trial court itself provided for such a reversal, it remains a possibility.

Bear in mind, however, that a major reason for the trial court decision in favor of the deal was that 1] Phil's dissent rights were intact, and 2] 80% of he shareholders voted to accept the deal and will receive a premium over the IOC pps prior to the deal.  Still, the appellate court could find that those  two reasons were insufficient to counteract the corporate governance failings surrounding the 'fairness' opinion that were outlined in the lower court decision.

It is very unlikely that either Exxon or IOC would move to alter the deal in any way before the appellate court decision. Finally, after the Halloween hearing date, I don't expect an appeliate decision for a few weeks.