PERTH (miningweekly.com) – Chairperson of ASX-listed Karoon Gas Robert Hosking on Friday urged shareholders to vote against a board restructure proposed by shareholder Pegasus.

Pegasus, which manages a 2.4% stake in Karoon on behalf of an unnamed third party, was proposing the removal of independent director Geoff Atkins and the appointment of three of its own nominees.

Furthermore, Pegasus was proposing that Karoon abandon its exploration strategy in favour of increased merger and acquisition (M&A) activity.

However, Hosking on Friday called into question the suitability of the Pegasus nominees - Colin Goodall, David Bamford and Glenda McLoughlin - saying that none of the nominees had been successful in creating meaningful shareholder value in their previous companies.

Furthermore, Hosking said that Pegasus had provided no detail around the types of assets being targeted in its proposed M&A strategy for Karoon, or how this strategy would deliver value or how it would be funded.

Moreover, Hosking said that it was unclear whether Pegasus or its undisclosed shareholder partner would have an interest in any of the assets envisaged for purchase.

“If Pegasus is truly confident that its strategy will add value, it should be happy to provide all of the information,” Hosking said in a letter to shareholders.

He urged shareholders to vote against the proposals submitted by Pegasus at an annual general meeting scheduled for October 27, and to allow the company to continue with the process of recruiting an independent chairperson.

In June this year, Karoon signed a sales and purchase agreement with fellow-listed Origin Energy to divest of its 40% holding in two exploration permits in Western Australia’s Browse basin, in a deal valued at up to $800-million.

In terms of the agreement, Origin would pay Karoon $600-million cash upon completion of the agreement, followed by a further $75-million once a final investment decision (FID) was reached and another $75-million on first production.

A further $50-million would be payable on first production if 2P reserves, at the time of the FID, reached certain thresholds.