Novus in talks with potential rival bidders: Report

Australia?s oil company Novus Petroleum Ltd. Chairman David Blair said on Friday that talks are continuing with a number of parties that may lead to a rival takeover bid for the company, Dow Jones Newswires reported on Friday.

Blair and Novus' independent directors urged shareholders to reject a A$326 million hostile takeover bid from Indonesia's PT Medco Energi Internasional, saying the A$1.74 a share offer "substantially" undervalues the company.

A second bid, led by Novus Chief Executive Officer Bob Williams and backed by Hong Kong-based Crosby Capital Partners launched a A$1.77 a share offer.

Earlier this week, an independent expert valued Novus in the range of A$1.96 to A$2.75 per share and concluded that the Medco offer, launched a month ago, is neither fair nor reasonable.

Novus' independent directors believe Medco hasn't factored in the quality of Novus' portfolio, which has both geographic and asset diversity as well as "material upside" from several development and exploration assets, Blair said in a letter to shareholders.

The Medco bid has been "opportunistically timed" to take place before the benefits of Novus' U.S. and Middle Eastern expansion are reflected in the share price, he added.

On Friday, Novus shares were trading 2 cents higher at A$1.93, a substantial premium to both offers.

"Novus continues to have preliminary discussions with a number of parties potentially interested in making counter offers," Blair said in the letter.

Medco said last week that it may raise its bid to beat rival offers.

Analysts don't rule out a third party joining the bidding, with Australia's Santos Ltd. seen as one potential suitor. (*)