A few months ago, Oil Search was ready to break the bank to purchase InterOil for a massive US$2.2 billion in what would been a master-stroke from Peter Bolton amidst the Oil Price lumps and favorable gas pricing……..however, a mystery bidder has just been revealed…. Exxon is preparing a whooping US $3 billion bid and spoil the party of Oil Search….
Do we see Oil Search increasing it’s bid when that happens?? Who becomes the winner in this bidding war? Total has already bought most of InterOil assets, the last remaining is up for grab……there is only 1 WINNER…..and that would be INTEROIL !!
JPMorgan is believed to be the investment bank working with Exxon Mobil on a counterbid to rival the current $US2.2 billion ($2.95bn) offer that’s on the table from Oil Search.
The news comes after speculation swept the market in the past fortnight that the US-based banking powerhouse was working on a $3bn deal in the resources space.
Bankers at JPMorgan — and those at Credit Suisse and UBS, who are the advisers for InterOil — would have no doubt been working through the weekend to assess the latest Exxon offer, which was still understood to be under negotiation on Friday when the company advised the market that another bid had been put forward.
On Friday The Australian revealed online that the mystery bidder was Exxon, before sources close to situation confirmed that was the case.
The focus will now be on whether advisers can firm up the
Exxon Mobil counteroffer by July 28.
For its part, InterOil’s board did not want to comment further until it had a deal in place. InterOil directors said they continued to recommend shareholders approve the Oil Search bid, which is due to be voted on at a meeting on July 28.
Exxon is thought to want InterOil’s stake in the big onshore Elk/Antelope field to help it profitably expand the two-train PNG LNG project that exports gas from the Highlands through an LNG plant at Port Moresby.
Elk/Antelope is part of the undeveloped Papua LNG project that is operated by French oil major Total, which is yet to decide whether to develop the field as a stand-alone LNG plant or try to combine with PNG LNG.
Exxon’s bid, if it becomes binding, will pose a dilemma for Total, which stands to see its control over the Papua LNG project reduced if it does not make a counterbid.
Oil Search, which has stakes in both PNG LNG and Papua LNG, made the initial InterOil bid to promote the merging of the projects, which it says can yield more than $US2bn of savings.
Under a complex deal, Oil Search has agreed to pay 8.05 of its shares for every InterOil share, valuing the target at $US40.25 per share when the deal was inked in May. A contingent value right would also be issued for InterOil, worth $US6.05 per share for every trillion cubic feet certified at Elk/Antelope beyond 6.02tcf when an appraisal well is drilled later this year.
Oil Search, run by Peter Botten, and its advisers, Macquarie Capital and Goldman Sachs, are assessing options.
Oil Search shares on Friday rose 19c, or 3 per cent, to $6.86.