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