offer for oil search unlikely to be sweetened says woodside chief 2360942015
But major shareholders in Oil Search are on the phone with Woodside…
In an interview with Fairfax Media at the Australia Korea Business Council summit in Sydney on Friday, Woodside Petroleum Limited (ASX:WPL) chief executive Peter Coleman said he saw little justification for improving the company’s AU$11.6 billion bid for Oil Search Limited (ASX:OSH).
"We are paying a full price on every measure," Mr Coleman said, pointing to the recent volatility in the value of mining and commodity shares, and adding that it showed the worth of Woodside’s offer.
Oil Search’s board of directors had rebuffed the offer from Woodside on the grounds that it had “little merit” and “grossly undervalued” their company.
Mr Coleman’s statement threw cold water on recent market speculation that Woodside was mulling a debt issue of AU$2 billion to AU$3 billion as a precursor to sweetening its bid. "Offering more is dilutive to our shareholders," he said. "We are already at that balance point and we don't want to go any further."
Mr Coleman, who has a reputation for negotiating hard on Woodside’s acquisitions, is also loath to add a cash component to the offer – which would mean the stock ratio would have to be tweaked lower. "In this environment cash is king,” he remarked. “You don't want to be using cash.”
Mr Coleman also revealed that even though Oil Research had turned down his offer, its major shareholders, such as the Papua New Guinea government, Abu Dhabi's International Petroleum Investment Co and Capital Group were “picking up the phone and talking to us,” according to Fairfax Media.
In fact, Papua New Guinea Prime Minister Peter O'Neill was open to selling the government’s 9.8 per cent stake in Oil Search if the price was right, Mr Coleman said, referring to his recent, very fruitful meeting with the Minister.
In view of the current stalemate on the deal, could a third party place a competing bid for Oil Search?
Mr Coleman dismissed the idea on the grounds it was unlikely somebody could better Woodside’s offer.
On his own strategy for Oil Search: "I'm a patient man. This is a once-in-a-cycle opportunity to do something quite special."
