January 11, 2019 / 2:51 PM / a month ago

Indonesia's Medco Energi offers 340 million pounds for UK-listed Ophir

(Reuters) - Indonesian oil and gas group Medco Energi Internasional Tbk PT (MEDC.JK) said on Friday it could offer 340 million pounds ($436 million) in cash for London-listed Ophir (OPHR.L), which has assets in south-east Asia.

Ophir’s shares fell almost 50 percent last year as it failed to find financing for a liquefied natural gas project in Africa’s Equatorial Guinea. It expects to write down $300 million on the project and also shift its headquarters from London to Asia, where it bought assets in 2018.

Ophir’s current output of 25,000 barrels per day (bpd) of oil equivalent combined with Medco’s stated 2018 target of 85,000 bpd of oil equivalent would make Medco, which has been expanding, the seventh largest non-national oil company upstream producer in Southeast Asia, according to energy research firm WoodMac.

“Medco confirms that while discussions with Ophir are continuing, an agreement on a recommended offer has yet to be concluded,” Medco said in a statement following its first approach to buy Ophir last month.

Medco said shareholders of Ophir would receive 48.5 pence in cash for each Ophir share, a 46.1 percent premium to Ophir’s share price of 33.2 pence on Dec. 28, the last business day before Medco Global announced the possible offer for Ophir.

Under British takeover rules, Medco’s fully-owned subsidiary PT Medco Energi Global has until Jan. 28 to make a firm offer or walk away.

(GRAPHIC: Ophir Energy boosted by Medco interest - tmsnrt.rs/2AHyDUN)

In response to Medco’s move on Friday, Ophir said the Indonesian company had in October made an unsolicited approach to buy Ophir at an offer price of 58 pence per Ophir share which was reduced to 53.8 pence in December.

Ophir said that following the absence of a license extension on the Africa asset and a decline in oil price, Medco submitted a revised proposal on Dec. 20 of 53.8 pence per Ophir share.

“This morning, Medco submitted an updated possible offer ... and subsequently made a unilateral announcement without any further discussion,” Ophir said.

Founded by oil and gas tycoon Arifin Panigoro, Medco has made sizeable acquisitions in recent years, including leading a $2.6 billion purchase of the Indonesian unit of Newmont Mining Corp (NEM.N) in November 2016. It also operates power plants in Indonesia.

Medco, headquartered in Jakarta, earns the bulk of its revenue from oil and gas operations, mainly in Indonesia. The firm has focused on expanding its Southeast Asia production and adding to its existing assets in the Middle East and North Africa.

Standard Chartered Bank is acting as financial adviser to Medco.

Shares in Ophir, which has a market value of 305 million pounds, were 3.4 percent higher at 44.5 pence at 1138 GMT.

Additional reporting by Shadia Nasralla; Editing by Shinjini Ganguli; Editing by Elaine Hardcastle

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