Oil Search has rejected a $11.6 billion takeover bid from energy giant Woodside, labelling it “highly opportunistic”.
Oil Search announced on Monday morning that its board had unanimously rejected the all-scrip bid, saying it grossly undervalued the company.
Woodside offered one share for every four shares held in Oil Search, whose securities were valued at $7.45 at Friday’s close, up about 10 per cent since news of Woodside’s approach was made public.
Oil Search chairman Rick Lee said the board was prepared to consider proposals “that reflect compelling value [but] … clearly this proposal falls well short of that test”.
Adelaide-based resource giant Santos has a 13.5 per cent share in the ExxonMobil-managed PNG LNG project.
The potential sale was looked upon as a circuit breaker to restore Santos’ dipping share prices.
Woodside made the merger proposal to Oil Search on 3 September 3.
The resources giant announced on the ASX it was “surprised and disappointed” that the board had rejected the proposal without a meeting to understand the benefits of the opportunities or to negotiate the terms of a possible merger.
“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.”
– with AAP
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