Ophir accepts Medco’s £391m takeover offer after bidder ups price
Ophir Energy has accepted a £391m takeover bid from Indonesian oil firm Medco Energi, just over two weeks after its initial offer was rejected.
Board members were convinced after Medco upped its 48.5p a share bid to 55p.
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Ophir becomes the second smaller energy company to be taken private from the London exchange in 2019, after DNO’s hostile bid for Faroe Petroleum was accepted earlier this month.
The bid, which is a nearly two-thirds premium to Ophir’s closing price on 28 December, still needs to win approval of 75 per cent of shareholders before 20 June.
“The final decision is in the hands of shareholders, hopefully they will think that this brings value,” Medco chief executive Roberto Lorato told Morning Wire
The bid is 4p higher than Ophir’s 50.6p closing price yesterday, which gave it a market value of £358m. Shares rose to within 1p of the offer price this morning. Medco’s shares increased 14.5 per cent this morning.
Lorato said he was highly confident that the deal would go through after the Ophir board unanimously recommended it to shareholders.
“The acquisition of Ophir gives us an opportunity to acquire a portfolio which is highly complementary to our own in Indonesia and internationally. The combination will make a larger company with a more balanced portfolio of exploration, development and producing assets,” he said.
Ophir had initially rejected a 48.5p per share offer, which was 3.5p lower than Jefferies’s target price at the time, claiming it undervalued the company.
The announcement on 14 January left Medco with two weeks to made a formal offer for the London-listed firm. However, the deadline was extended Monday.
Read more: Ophir Energy rejects Medco's £343m offer, saying price is too low
When the deal was announced, CMC Markets analyst David Madden said it will “create a robust producer in south east Asia. Medco are clearly confident in their own ability to perform well given the uncertain outlook in the oil market.”
The deal will cement Jakarta-listed Medco as one of the largest non-government oil producers in south-east Asia.