Woodside Petroleum announced the withdrawal of the merger plan with Oil Search on the Australian Stock Exchange on Tuesday morning.

“Woodside advises that it has informed the Oil Search board that it has withdrawn its proposal to merge the businesses.

“Woodside is not pursuing any alternative transactions to combine the businesses.”

Woodside had offered one of its shares for every four shares in Oil Search.”

Moments later, Oil Search managing director Peter Botten confirmed the company had held off the $11.6 billion takeover offer submitted in September.

“As previously advised, the Oil Search board concluded that the indicative Woodside proposal grossly undervalued the company,” he said.

“Oil Search remains focused on delivering value for its shareholders, by continuing to produce from its low-cost assets and progressing the development of its world-class growth.”

The Woodside offer, one share for every four Oil Search shares, was promptly rebuked by the smaller of the energy companies.

At 10.25am (AEDT) Santos was down 11 cents, or 2.6 per cent, at $4.12, and Woodside Petroleum was down 9.0 cents, or 0.31 per cent, at $28.98.