Third bidder for Novus unlikely to emerge: Sunov

Sunov Petroleum Pty Limited Friday said Novus Petroleum Ltd shares were trading based on the unrealistic expectation a third bidder was in the pipeline, Asia Pulse reported.

The A$328 million (US$251 million) takeover offer by Sunov for Novus was announced in January and trumped an earlier A$1.74-a-share bid by Indonesian oil and gas company PT Medco Energi Internasional Tbk.

Sunov, the bidding vehicle of Crosby Capital Partners and Novus managing director Bob Williams, today said it believed the two bids were the only ones on the table.

"The (Novus) Independent Directors continue to reference discussions with alternative counter bidders and the market appears to be trading on this expectation," Sunov director and Crosby group managing director Ilyas Khan said.

"We believe that if there were other bidders, they surely would have emerged by now and we are therefore concerned that the market is currently trading based on an unrealistic expectation that there's another serious bidder or bidders about to bid."

Khan said was responding to a target statement issued by Novus' independent directors in response to the Sunov offer.

The statement included an independent expert's report valuing Novus shares at between A$2.02 and A$2.86 each, less than the A$1.77 a share offered by Sunov.

The report said the Sunov offer undervalued Novus and did not take into consideration the high oil price or Novus' asset portfolio.

In a letter to shareholders, Novus chairman David Blair said discussions were also ongoing with alternative counter bidders.

"It is now three months since the Medco offer was announced and the only alternate proposal that has emerged has been our offer," Khan said.

"The Sunov offer is a real offer to shareholders and is the highest and least conditional offer available to shareholders.

"We believe that if there were other bidders, they surely would have emerged by now and we are therefore concerned that the market is currently trading based on an unrealistic expectation that there is another serious bidder or bidders about to bid."

Khan said that the independent experts report also noted the time that had elapsed since the announcement of the Medco offer and the fact no other bidders had emerged.

"Sunov ... believes shareholders should also consider the point that despite the fact the independent directors state that they have widely canvassed counter bidders, it may be difficult for Novus to find another serious bidder for the asset package that is represented by Novus," Khan said.

He said the independent expert's report also noted that it was arguable that Novus portfolio of assets was so diverse that no single bidder was likely to be interested in acquiring all its assets, reducing the likelihood of shareholders realising full underlying value through a bid.

"We believe that the Sunov offer (if A$1.77 a share) fairly values Novus when one takes into account the risks identified by (the independent expert) and any realistic assessment of upside," he said.

"Shareholders of Novus have indicated that they do not want to lose the Sunov offer as we believe they realise that the Novus share price will fall significantly if the current takeover offers do not proceed."

Company sources said reports out of Indonesia indicated Medco would make a new offer by as early as Friday.(*)