Hurricane CEO Isautier Loves To Mix It Up A Bit
4/20/019:24:31 AM Quick Quote: T.HHL.A
HHLF
NIS 20.61 (-0.34)
Chris Varcoe
Bernard Isautier likes smoking unfiltered European cigarettes, wearing dapper blue suits and vacationing on his private island in French Polynesia.
The urbane chief executive officer of Calgary-based Hurricane Hydrocarbons also likes a good scrap.
Since entering the Canadian oilpatch in the 1980s, the Paris-educated Isautier has seen plenty of battles -- enduring hostile takeovers, corporate financial turmoil and truculent shareholders.
So, when Isautier faced a $189-million hostile takeover bid from Hurricane's largest shareholder last week -- launched by a powerful Kazakhstan group called Central Asian Industrial Holdings NV -- the diminutive executive says the bid was unexpected, but he wasn't rattled.
"I remain extremely cool in these kinds of situations," he says from London, where the company keeps its executive headquarters.
"I see this situation with complete confidence."
Just before the Easter weekend, Central Asian, Hurricane's biggest shareholder with a 30-per-cent stake, made a bid to gain control of 53 per cent of the company.
It offered $10.25 per share, an offer Isautier deems "ridiculously low" given the company's future growth prospects in the former Soviet republic of Kazakhstan, where it produces about 90,000 barrels of crude per day.
However, the bid came as a surprise for Isautier -- he received it on Good Friday while staying in a Moscow hotel room -- since Hurricane had been resurrected after moving out of creditor protection last year.
For Isautier, the experience reminds him of another hostile takeover fight that captured the Canadian oilpatch's attention 13 years ago.
In early 1988, he was the head of Polysar Energy and Chemical Corp. when it received an unsolicited bid from pipeline giant Nova Corp., then run by Bob Blair.
At the time, Nova offered $14 per share for a partial stake of Polysar -- much like Hurricane's current offer.
Nova then accumulated almost 25 per cent of the shares, but after a protracted battle, Blair boosted the offer, almost doubling its overall value to $2 billion in cash and shares.
"This situation is very similar to the Polysar situation. You have someone knowledgeable about the upside potential of the company," Isautier says. "The company had improved substantially but the market was kind of cautious to recognize the improvement."
Isautier, who holds degrees in math and physics from the Ecole Polytechnique of Paris, first came to Canada in the 1980s, working with Aquitaine of Canada, Canterra Energy Ltd. and then Polysar.
In the 1993, he took over Canadian Occidental Petroleum Ltd., a big petroleum producer with a huge oilfield in Yemen and a large shareholder in Los Angeles -- Occidental Petroleum Corp.
"Bernard is very charismatic and conveys a larger-than-life image," says Kevin Finn, who worked with Isautier at CanOxy. "When Bernard comes into a room, people listen."
While the company enjoyed financial success, it was rumoured that CanOxy management had disagreements with Occidental. Isautier, who left the organization in 1992, still refuses to discuss the matter.
Hurricane shareholder Bill Wheeler, who also owned stock in CanOxy in the early 1990s, was impressed by Isautier's ability to protect the interests of all investors, not just its largest one.
"He took no nonsense from his American controlling shareholder and basically got moved aside because of it," says Wheeler, head of Vancouver-based Leith Wheeler Investment Counsel. "He cares about shareholder value."
In 1997, Isautier ran Chauvco Resources International Ltd. when it operated in Gabon, a petroleum producer which later went into bankruptcy.
Chauvco Resources International was forced to take a $16.4 million write-down of assets in 1998 in the western African country of Gabon. Company officials had predicted production of more than 10,000 barrels a day, but levels from the Remboue field declined to 2,700 bpd.
In September 1999, Isautier took over Hurricane. At the time, the Canadian company was under court protection from creditors and it successfully restructured last year.
"Bernard essentially rescued this company. His persistence and skill saved it," Wheeler says.
Since he took over, Hurricane's shares have increased from 61 cents on the Toronto Stock Exchange to $10.05 on Thursday, a 1,548-per-cent increase.
But Central Asian officials aren't impressed with the CEO.
They note that the company's stock price was "lousy" throughout the winter, as its shares plateaued at $10.40 last November and dropped into the $8-range earlier this month on the Toronto Stock Exchange.
The company also didn't move quickly enough to expand further in Kazakhstan, says one Central Asian executive, who spoke on the condition of anonymity.
"He's already getting a pretty selective memory about his corporate CV," the official said. "He doesn't have a great relationship with his majority shareholder and this proves it."
Canadian energy analyst Eleanor Barker, who has followed Isautier's career since the 1980s, believes Central Asian has little chance of winning, although Hurricane faces the byzantine politics of Kazakhstan.
"He knows what he's doing and I don't think this potential takeover is really the troubling part," adds analyst Wilf Gobert of Peters & Co. "What's really troubling is this throws into the face of the public markets the problems of operating in Kazakhstan."
Isautier isn't not worried about the personal criticism, saying discussions over management's style are merely tactical.
And while he's battling the takeover, Isautier can still get away to his own private island near Tahiti. His "exclusive hideaway resort" is accessible only by boat or helicopter.
"It's far from civilization, so I'm able to extract myself," he adds. "Although I'm busy, I can manage this situation."
Bernard Isautier Facts
- Employment -- Chairman, CEO and president, Hurricane Hydrocarbons.
- Citizenship -- Canada and France.
- Education -- Degrees in mathematics and physics from Polytechnique School, Paris. MBA from Institute of Political Sciences, Paris.
- Employment History -- Before 1990, chief executive of Polysar Energy and Chemicals Corp., Canterra Energy Ltd., Aquitane of Canada. From 1990 to 1992, chief executive of Thomson Consumer Electronics Co.; from 1993 to 1995, chief executive of Canadian Occidental Petroleum Ltd.
© StockHouse.com | Disclaimer |
