Medco shareholders support Novus takeover plan

Shareholders of the publicly listed oil company PT Medco Energi Internasional have agreed to the company?s plan of acquiring Novus Petroleum Ltd, an oil company listed on the Australian Stock Exchange (ASX).

In a letter sent to Jakarta Stock Exchange (JSX) on Monday, the company said its general shareholders meeting on Jan. 23 also gave the management options to acquire Novus up to 100 percent.

Medco earlier offered to buy 90 percent of Novus? shares on issue at A$1.74 per share, 35 percent higher than Novus' closing share price last week at the ASX.

It said it would use the proceeds from the US$250 million unsecured notes issued last May and an operating cash of around US$84 million to finance the acquisition.

Novus shareholders are scheduled to make a decision on the acquisition plan on Feb 10, Medco has said.

The acquisition would raise Medco's average production by 21 percent from 84,500 barrels oil equivalent per day (BOEPD) to 102,275 BOEPD, with gas contributions increasing from 17 percent to 26 percent, Medco has said.

Novus? management has rejected a A$326 million (US$253.6 million) offer from Medco, saying that the offer was inadequate and substantially undervalued, citing that the bid took place before the benefits of Novus' U.S. and Middle Eastern operations were reflected in its share price. However, Medco felt optimistic that its bid would be successful, citing that Novus? shareholders rather than the firm?s management would make the final decision. (Hotma)