The future chances of the $11.6 billion Woodside (WPL) bid for Oil Search (OSH) could be decided this Sunday when the CEOs of both companies are due to meet.
Woodside’s Peter Coleman and Oil Search’s Peter Botten will meet in Sydney, with the Oil Search boss pushing for a higher premium than the skinny 13% suggested by the Woodside offer of 0.25% of its share for every Oil Search share.
Oil Search shares ended down around 0.6% at $7.85 on the ASX yesterday and Woodside shares closed at $29.90, up 0.8%.
Oil Search will reportedly reject a demand by Woodside for exclusivity in their talks to try and develop an auction, with its PNG LNG partner, ExxonMobil Corporation poised to emerge as a rival bidder.
Woodside’s offer featured a set of conditions including a satisfactory due diligence process and a request that Oil Search grant its energy rival an agreed period of exclusivity.
But Fairfax Media reports this morning that Exxon and Oil Search are though to have held informal talks yesterday involving Mr Botten.
Oil Search’s board is expected to meet by the end of this week and according to Fairfax, is tipped to push for a much higher offer closer to a 25% to 30% premium.
Exxon has to become involved for Oil Search to realise that higher a premium.
Exxon has so far resisted any merger and acquisitions activity in the current downturn in oil and gas prices, although its immense financial strength would give it front row seats. It failed to launch any counter bid to $US60 billion bid by Shell for BG Group, which is the biggest example of M&A activity so far in the downturn.
