Oil Search ready to rebuff Woodside takeover offer
Woodside chief Peter Coleman is having a hard time cornering his acquisition-savvy opponent Peter Botten at Oil Search.
Woodside Petroleum chief Peter Coleman is having a hard time cornering his acquisition-savvy opponent Peter Botten at Oil Search, with Woodside claiming Oil Search has postponed a scheduled high-level meeting between the companies over Woodside’s takeover offer.
The Oil Search board is now expected officially to knock back Woodside’s unsolicited, conditional (and most say lowball) $11.7 billion all-scrip approach as early as today without directly hearing out its potential suitor.
“Sunday’s meeting was postponed at the request of Oil Search,” a Woodside spokesman said. “We look forward to explaining this merger proposal, provided (to Oil Search) on September 3, when the other party is able to schedule a meeting.”
Earlier last week, it was clear Woodside was pushing for a Sunday meeting between Mr Coleman, Mr Botten, Woodside chairman Michael Chaney and Oil Search chair Rick Lee. But by Friday it was not looking certain the meeting would happen.
The intriguing takeover tussle is looking like a hard sell for Woodside, which has said it is on the lookout for cheap acquisitions of distressed assets during the oil downturn. Oil Search has a strong balance sheet, good growth prospects and a 29 per cent stake in the ExxonMobil-run PNG LNG, one of the world’s most profitable LNG plants.
Mr Botten, who has been at the helm of Oil Search for 21 years, is unlikely to engage over a lowball offer and will demand a big premium, while Mr Coleman will spark shareholder concern if he pushes a bid that does not offer bottom-of-the-cycle value.
On Friday, Woodside shares fell 71c to a 10-year low of $28.41, valuing the 1-for-4 Oil Search bid at $7.10 per share. Based on last Monday’s prices, before Tuesday’s bid confirmation, the premium for the bid was 13 per cent.