Novus in talks with potential rival bidders: Report
Wednesday, January 14 2004 - 12:37 PM WIB
``We have been approached by a number of parties,'' Novus Chief Executive Bob Williams told Bloomberg News. ``Discussions are progressing.'' Novus stock closed 2 cents higher at A$1.86 in Sydney, above Medco's A$1.74 a share offer price.
Medcowants to boost production and expand in the Middle East and the U.S. CEO Rashid Mangunkusumo said in November oil output may decline by about 17 percent this year to 60,000 barrels a day because of aging fields.
Novus sent out information memorandums to potential buyers of its assets this week. The Sydney-based company declined to say who received the documents. Novus, which is being advised by Merrill Lynch & Co., may update the market on any talks with potential bidders Jan. 23, when it releases its target statement.
About 29 percent of Novus's oil and gas reserves are in Indonesia, with 27 percent in the U.S., 24 percent in Oman and 14 percent in Australia. The company makes about 55 percent of its revenue in Indonesia. Novus also has exploration interests in Pakistan and the United Arab Emirates.
Novus owns a stake in the Cooper Basin gas venture in South Australia. Santos Ltd., Australia's No. 3 oil and gas producer, operates the field.
Mark Kozned, head of investor relations at Santos, declined to comment on whether the company may bid for Novus's assets.
``There are a number of aspects of Novus that may be quite appealing to Santos,'' said Johan Hedstrom, a resources analyst at Aegis Equities Research Pty. Santos is seeking to grow its U.S. and Indonesian businesses, and is considering entering exploration in the Middle East, he said.
Japan's Mitsui & Co., the biggest single shareholder in Novus with a 13 percent stake, hasn't decided whether to accept Medco's bid. Williams is in Tokyo meeting with Mitsui.
``We're still studying the situation, and we're working out the various options,'' said Hiroyuki Tsurugi, general manager, business department, in Mitsui's exploration and production division. ``We haven't made any decision.''
Mitsui bought its stake in Novus in September 2001, paying A$2.35 a share, as part of a plan to increase its international oil and gas business.
Seven investors -- including Mitsui, Australian fund manager and insurer AMP Ltd., J.P. Morgan Chase & Co., fund manager Maple- Brown Abbott Ltd. and National Australia Bank Ltd. -- hold about 60 percent of Novus's ordinary stock.
Jakarta-based Medco, the worst performing resources stock on the Jakarta Composite Index last year, made two failed bids for oil fields in the four months prior to its bid for Novus. The company, which is being advised by UBS AG, has said its oil output will decline 17 percent unless it can acquire new assets.
Medco's shares have surged 27 percent since the company announced its bid for Novus.(*)