Medco confident about Novus' acquisition plan
Medco confident about Novus' acquisition plan
P.C. Naommy, The Jakarta Post, Jakarta
Publicly listed oil and gas firm PT Medco Energy International
has yet to make a decision on whether to raise its bid for the
shares of Australian company Novus Petroleum Ltd and head off-
its rival.
"We won't know the credibility of our rivals until we read
their bidding statement," Medco president Hilmi Panigoro said on
Friday after a meeting of Medco shareholders here.
Medco earlier offered to buy 90 percent of Novus shares on
issue at A$1.74 per share, 35 percent higher than Novus' closing
share price last week at the Australian Stock Exchange (ASX)
However, a consortium consisting of Novus' chief executive Bob
William, and Hong Kong-based Crosby Capital Partners -- topped
Medco's bid by three cents at A$1.77 per share.
In response Medco would now make one of three possible moves:
maintaining its offered price at A$1.74 per share while reducing
its planned acquisition of 90 percent, matching the rival offer
but with different terms, or offering a higher bid, Hilmi said.
The acquisition plan would be fully financed from the
company's US$250 million unsecured notes issued in May, and from
operating cash in 2002 of around US$84 million.
Novus shareholders are scheduled to make a decision on the
acquisition plan on Feb. 10, however, Hilmi said that the
schedule might be delayed. "If either Medco or the consortium
changes its decision within one week of the scheduled time, the
deadline would automatically be extended by two weeks.
According to Hilmi, the acquisition would raise Medco's
average production by 21 percent from 84,500 barrels oil
equivalent per day (BOEPD) at present to 102,275 BOEPD, with gas
contributions increasing from 17 percent to 26 percent.
He added that since the final decision would be made by Novus
shareholders and not by management, he felt optimistic that
Medco's bid would triumph.
Novus management rejected on Friday a A$326 million (US$253.6
million) offer from Medco, saying that the offer was inadequate
and substantially undervalued.
According to a letter sent on Friday by Novus's chairman,
David Blair, to the ASX the bid took place before the benefits of
Novus's U.S. and Middle Eastern operations were reflected in its
share price.