PNG’s Oil Search has rejected an A$11.6 billion ($8 billion) all-share takeover offer by Australian LNG player Woodside.
“Following a detailed evaluation of the proposal, the Board has concluded that the proposal is highly opportunistic and grossly undervalues the company,” Oil Search said in a statement on Monday.
Under the proposal, Oil Search shareholders would receive all scrip consideration of 0.25 Woodside shares for every Oil Search share and represent a 31.7% shareholding in the combined entity.
In a response to Oil Search’s statement, Woodside said it is “surprised and disappointed” that the Board of Oil Search has rejected the proposal without meeting with the company.
“Woodside believes the proposal would create the regional oil and gas champion for both Papua New Guinea and Australia with a global portfolio of world class assets and development opportunities which would deliver significant benefits to both companies’ shareholders,” it added.
However, Oil Search, which has a 29 percent stake in the US$19 billion PNG LNG project, left the door open for new, higher offers.
“If any proposals are tabled in the future that reflect compelling value for Oil Search shareholders, we will engage on them,” the company said.
LNG World News Staff; Image: Oil Search