Petroleum Africa
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Wednesday, February 27, 2019
One shareholder in Ophir Energy is not particularly thrilled with Medco’s buyout offer. Petrus Advisers has asked for alternatives to Medco’s buyout offer to be presented immediately, and asked the company to put Petrus-backed directors in charge of overseeing the proposed changes.
Earlier this year, in an unsolicited approach, Medco offered roughly $437 million for the independent oil and gas firm. The offer, which was all cash, would have added to Medco’s holdings in southeast Asia and in Africa. Ophir turned down the offer and Medco came back, upping its bid to $511 million. Petrus believes that the Medco offer undervalues the company’s assets.
“At this point, Medco is paying less than the fair value of Ophir’s South East Asian production assets meaning they are gifted substantial synergies and the upside potential from Ophir’s licenses in Tanzania, Mexico and Equatorial Guinea,” Petrus said.
Petrus has also called on Ophir to resume talks with Equatorial Guinea about compensation for its license to the Fortuna oil block in the Central African country, which the government did not extend despite a $700 million investment by Ophir.
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