LNG specialists Oil Search have slammed the takeover offer by rival Australian firm Woodside Energy, as the board unanimously rejecting it.
Perth based Woodside had put the deal forward last week, in a package worth a total A$11.6 billion (US$8.1bn). The deal would have given Oil Search shareholders one Woodside share for every four held in Oil Search.
However, without a week passing, Oil Search has taken measures to stop the deal going any further, releasing a statement via the Australian Securities Exchange (ASX) titled ‘Oil Search rejects Woodside…..’
At a press conference held today, Oil Search Chairman Rick Lee answered questions and reaffirmed to analysts the company’s decision.
Rick Lee said, “ the proposal, on whatever basis you applied it, was significantly undervaluing Oil Search and certainly was not one that encouraged us to consider it further”
Oil Search’s main business is the production of LNG throughout Papua New Guinea (PNG). The nations government also holds a ten percent stake in the firm, which it bought a year ago for A$8.20 a share.
Although no public comment has been released by the PNG government, it is widely believed to be of the same opinion brought by the Oil Search board.
Woodside, in a counter statement to the AUX said ”Woodside is surprised and disappointed that the board of Oil Search has rejected the proposal without meeting with Woodside to understand the benefits of the opportunity or to negotiate the terms of a possible merger,”
The majority of analysts now believe the merger bid is dead and buried. It has been said that to get the ball rolling again, Woodside would have to up its bid from its current A$11.6 billion (US$8.1bn) to at least A$13 billion ($9.2 billion).
This along with the Oil Search board being so underwhelmed by the last offer and the PNG government wanting to contain an amount of control, it looks like Woodside will now walk away.