Sunov up bid for Novus, Medco undeterred

Rendi A. Witular The Jakarta Post Jakarta

The bidding process for Australia's oil and gas producer Novus Petroleum is heating up, as Australian-based Sunov Petroleum Pty said it would raise its bid for the company to counter a takeover bid by Indonesia's PT Medco Energi Internasional.

In a statement to the Australian Stock Exchange (ASX) on Thursday, Sunov said it would raise its bid to A$341 million (around US$250 million), or A$1.85 per share, from A$326 million, or 1.77 per share.

Sunov was jointly set up by Novus managing director Bob Williams and Hong Kong-based Crosby Capital Partners.

"By accepting the Sunov offer, Novus shareholders would receive a substantial premium, above the price of Novus shares traded in the period prior to the announcement of the bid by Medco last year," said Sunov director Ilyas Khan in the statement.

The Jakarta-listed Medco had earlier offered to buy 90 percent of Novus shares on issue at A$1.74 each, and has extended its bid for the sixth time without increasing its offer.

Sunov said that its takeover offer was the best offer available: the highest price and the least conditional, compared to those offered by Medco.

"The Medco offer of A$1.74 per share remains highly conditional and Medco has just extended its offer without increasing its price," said Khan.

Sunov has appointed Macquarie Bank Ltd. to advise in the takeover plan, while Medco is being advised by UBS AG, and Novus by Merrill Lynch.

In a reply to Sunov's new bidding price, Medco finance director Sugiharto told The Jakarta Post that the company was in the process of evaluating whether to raise its bid or to back down from it.

"We are still evaluating our stance. We have until May 11 to come up with a new decision," said Sugiharto.

In January, Medco said it had prepared three plans to respond to any rival offers: maintaining its offer of $1.74 per share while reducing the size of shares to be acquired; matching the rival offer but with different terms, or offering a higher bid.

Elsewhere, Novus chairman David Blair said in a statement to the ASX that the offers from Medco and Sunov were still below the price valued by independent appraiser Grant Samuel & Associates, which valued Novus shares at between A$1.96 and $2.75 a share.

"While Sunov's revised offer is below Grant Samuel's most recent valuation range, the independent directors are mindful that nearly four months has passed since Medco's offer was announced," said Blair.

Medco -- which was founded by businessman-turned-politician Arifin Panigoro -- was anxious to acquire Novus as the company-owned natural gas reserve in Brantas, East Java, was producing more gas over the last eight quarters to reach 64 million cubic feet per day (MMSCFD), or a gross average of 54 MMSCFD.

Medco once said it would switch to being a gas producer rather than an oil producer, due to the continual decline in its oil reserves lately.

The company is reportedly planning to obtain some shares in Kangean oil and gas block in East Java from energy firm BP Indonesia, a local unit of British-American energy giant, if it fails to acquire Novus.

Sugiharto declined to comment on the plan.