Novus awaits higher bid
Wednesday, March 31 2004 - 03:59 PM WIB
Mike Sandy, manager of corporate development at Novus, said it was now up to rival bidders PT Medco Energi Internasional of Indonesia and investment company Sunov Petroleum to increase their bids after a three-month bidding war.
"We're the Juliet and the ball is in the court of the two Romeos," Sandy told Dow Jones Newswires, after the company's independent directors rejected Sunov's A$1.77-a-share takeover bid.
"And we do have other parties that are still looking at potentially coming in," he added in an interview.
"We want the best price that we can get for our shareholders - that is what we're chasing at the moment," Sandy said.
A private company associated with Novus Chief Executive Bob Williams, Sunov unveiled its offer in January trumping Medco's A$1.74-a-share bid launched a month earlier.
Independent directors, including Chairman David Blair, have also rejected Medco's bid.
In a target statement released Wednesday in relation to the Sunov bid, Blair said an independent assessor now values Novus at A$2.02-A$2.86 a share.
The latest valuation by Grant Samuel and Associates is 4% higher than its A$1.96-A$2.75 a share estimate calculated in January after the Medco bid. Grant Samuel said the increase reflects higher oil prices and a reduction in the A$/US$ exchange rate.
"The independent expert has concluded that the offer by bidder (Sunov) of A$1.77 cash per Novus share is neither fair nor reasonable," Blair said.
Novus shares continue to trade at levels above both offers. They closed up two cents at A$1.87 on Wednesday, valuing the company at A$345 million.
Given there are two "live offers" for Novus, competitive tension may result in either Medco or Sunov raising their bids, Blair said.
"Additionally, the independent directors have widely canvassed alternative counter-bidders and...those discussions remain ongoing," he added.
Earlier this month, Santos Ltd. entered the battle for Novus when it agreed to buy the company's Indonesian and Cooper Basin assets from Sunov.
The US$192 million deal is conditional on Sunov succeeding in its takeover offer.
A person familiar with the situation said with two legitimate bids on the table, a knockout offer for Novus could win rapid acceptance from the company's institutional shareholders such as insurer AMP Ltd. and fund manager Maple-Brown Abbott.
"Historically once a company is in play they usually get swallowed," the person said, adding that he doesn't expect 13% shareholder Mitsui & Co. to obstruct the eventual winner.
Earlier this week, Medco Finance Director Sugiharto told Dow Jones Newswires that the company will decide whether to lift its bid for Novus within the next few days.(*)