Novus urges holders to reject rival?s A$1.77-a-share offer: Report

The independent directors of Australian oil and gas company Novus Petroleum on Wednesday urged shareholders to reject a rival A$1.77-a-share takeover offer from a private consortium backed by chief executive Bob Williams, Dow Jones reported on Wednesday from Melbourne.

An independent valuation of Novus commissioned by the directors calculated the company is valued at A$2.02 to A$2.86 a share.

"The independent expert has concluded that the offer by bidder of A$1.77 cash per Novus share is neither fair nor reasonable," said Novus chairman David Blair in a letter to shareholders.

Novus has also urged shareholders to reject a hostile takeover offer from Indonesia's PT Medco Energi Internasional valued at A$1.74 a share.

Blair said the Williams-backed offer, being made through a vehicle called Sunov Petroleum, "substantially undervalues" Novus' shares based on a number of independent valuations.

"The independent directors believe the bidder has not adequately factored in the quality of Novus' portfolio as well as material upside exposure from the key development and exploration assets in the U.S. and the Middle East," Blair said.

Given there are two "live offers" for Novus, competitive tension may result in either Medco or Sunov raising its offer price.

"Additionally, the independent directors have widely canvassed alternative counter bidders and...those discussions remain ongoing," Blair said.

"Each of the independent directors recommends that you reject the offer," he concluded. (*)