Indonesia's Medco To Send Out Novus Bid Document

Indonesia's Medco To Send Out Novus Bid Document

Dow Jones Melbourne

Australia's Takeover Panel rejected Thursday a request by Novus Petroleum Ltd. to temporarily prevent Indonesia's Medco Energi Internasional from mailing out documents to the Australian energy company's shareholders.

The refusal follows claims by Novus that two bidder's statements already released by Medco don't provide enough disclosure for shareholders to consider Medco's A$326 million hostile takeover offer.

"The panel has...decided not to make any interim orders preventing the dispatch of the bidder's statement," the Takeovers Panel said.

Any shortfall in disclosure can be dealt with by issuing a subsequent bidder's statement or Novus itself can make shareholders aware of its concerns.

At the heart of the matter, Novus has expressed concerns the Medco bidder's statement contains no information as to whether it intends to refinance notes issued by Novus in the U.S.

It also claims a report prepared for Medco by Indonesian firm Madani Securities has deficiencies in the summary of the valuation of Novus.

Included in Medco's bidder's statement, the Madani report said based on public information, Novus shares could be valued from A$1.40 to A$1.90 a share.

On Dec. 22, Medco launched a surprise A$1.74 a share takeover offer, valuing the Australian company at A$326 million.

Among other concerns, Medco has not stated whether it intends to waive a condition stating it will only pay a maximum US$5 million on Novus' existing US$80 million notes.

If there is a change of control, Novus said it has estimated a potential liability of between US$14 million and US$15 million.

At 0035 GMT, shares in Novus were down one cent at A$1.83. The stock remains above the bid price as investors bet that

Medco may raise its bid or that another bidder may emerge.