Lawndale Capital Management and Montclair Energy still question Equal Energy's $230 million deal

Equal Energy is urging shareholders to approve a $230 million bid by Tulsa-based Petroflow Energy to acquire the company. The proposal has been questioned by two of the company’s largest shareholders.
by Jay F. Marks Published: June 12, 2014

Shareholders will determine the future of Equal Energy Ltd. next month at a special meeting in Calgary.

They are being asked to consider a $230 million offer from Tulsa-based Petroflow Energy Corp. to acquire all of the company’s outstanding stock.

Two-thirds of them must sign off on the deal for it to be completed, but one of Equal’s largest shareholders said Wednesday it still is not sold on the Petroflow proposal.

Lawndale Capital Management LLC has been critical of the proposed deal since it was announced in December, arguing it might not provide adequate compensation for Equal’s shareholders. The California-based investment adviser has suggested it would support another alternative that would return more money to shareholders than Petroflow’s offer of $5.43 a share.

Lawndale said it is reviewing the 120-page proxy statement Equal filed Wednesday, but it has decided to vote against the “golden parachute” compensation that could be paid to the company’s executive if the deal is completed. The compensation vote is not binding.

Five Equal executives stand to receive more than $500,000 each if shareholders approve the deal, led by CEO Don Klapko at $2.8 million. Klapko also would earn an additional $2.4 million from sale of his Equal stock, according to the proxy statement, which indicates he controls about 440,000 shares.

by Jay F. Marks
Energy Reporter
Jay F. Marks has been covering Oklahoma news since graduating from Oklahoma State University in 1996. He worked in Sulphur and Enid before joining The Oklahoman in 2005. Marks has been covering the energy industry since 2009.
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