screwed and shafted, page-12

re: counter bid has to come Posted by Wshak on TMF. Aidan Heavy spinning a bit of bull that he is not taking advantage of share price weakness when he and Merrill actually caused it, unbelievable Irish blarney

MELBOURNE (Dow Jones)--Hardman Resources Ltd. (HDR.AU), an Australian mid-tier oil and gas company struggling with disappointing Mauritania output, Monday said it agreed to a A$1.47 billion (US$1.1 billion) takeover bid from Tullow Oil PLC. (TQW.DB).

The announcement sparked intense speculation that other local oil and gas companies could now be targets and boosted share prices across the sector.

Hardman's star has been on the wane in recent months with a reduction in reserves at its flagship Mauritanian joint venture adding to the impact of falling oil prices.

Tullow chief executive Aidan Heavey dismissed suggestions the U.K. group has timed its run to take advantage of the recent dip in Hardman's share price.

"We weren't trying to do it on the cheap," he told reporters.

Tullow is offering 79.79 pence or A$2.02 per Hardman share, a 60% premium to the volume weighted average price of Hardman's shares over the past week. In late April Hardman issued 65.9 million shares at 98p each, before the severe production problems at Mauritania's Chinguetti field became apparent.

Hardman managing director Simon Potter said the offer recognizes the value of the company's production and exploration assets in Mauritania, Uganda, Tanzania and the Falkland Islands.

"The board has concluded that Tullow's offer has the value and flexibility to appeal to Hardman's varied shareholder base, and we recommend the offer to our investors," he said.

Heavey said the offer price has been formulated on the value of Hardman's business before the recent drop in the shares and is an "aggressive price".

"We felt that the best way to get a deal done is to offer the top price and by doing that there is little likelihood of any other bidders coming into it," he said.

Analysts said there appears to be few signs of a rival bid, with Hardman's shares closing up 56% at A$2.04, off a recent low of A$1.17.

More than 10% of the stock was traded, with a senior broker saying there is an outside chance Tullow might be challenged by other European groups with stakes in Mauritania such as Premier Oil (PMO.LN) and BG Group (BG.LN).


Merrill Lynch Advising Tullow

Macquarie Equities oil and gas analyst Andrew Blakely said Tullow is offering a full price, paying about US$40 a barrel for Hardman's known reserves.

CommSec analyst Martin Petch said the recent drop in oil prices and corresponding dip in share prices of oil stocks means more takeovers could follow.

"It is a general trend with some of the majors looking for reserves they can pick up," he said.

Tullow is a 50/50 joint venture partner with Hardman in its Ugandan oil project and already has assets in Mauritania.

Heavey said Tullow has long considered Hardman a good fit and takeover talks began at a dinner he had with Potter five weeks ago.

The U.K. company plans to keep Hardman's Perth office open in the "medium term" and Heavey said it hopes to retain many of Hardman's staff, including Potter if possible.

Tullow is one of Europe's largest independent oil and gas producers, with operations in 15 countries and a market capitalization of GBP2.4 billion.

Hardman shareholders are expected to vote on the scheme of arrangement for the deal in mid-December.

Among other oil and gas stocks to also show gains in local trade, Tap Oil rose 5.8% and Roc Oil added 3%. Roc is a smaller partner in the Mauritania fields.

Hardman's largest shareholder with a 9.6% stake is Merrill Lynch, whose investment banking arm is advising Tullow. Hardman is advised by Emerald Partners and Morgan Stanley.

The bits in bold are obviously appealing to Hardman's shareholders rather than Tullow's!

My view is that the timing is good and they obviously have been opportunistic, much as Sterling were with Fusion Oil and Gas. Having bought recently, I'm obviously very pleased but a little miffed since I was looking to buy a lot more on weakness due to a possible Flamant failure.

Right now, I think anyone selling in the market is absolutely nuts since there is a cash offer on the table with a counterbid still possible, especially with material news due from Flamant. There are a whole load of reasons why the shares could appreciate from this point, whilst virtually none why they should drop.

I hope that 61pt8 isn't too disappointed. At least Tullow have been kind enough to put a price on Hardman's assets whihc was well in excess of the market's valuation. If the company is really worth a lot more, others are welcome to get their wallets out.

WShak