Jul 1 2016 at 8:04 AM
Papua New Guinea gas explorer InterOil has received a rival offer that threatens to derail Oil Search's friendly $US2.2 billion takeover deal.
InterOil described the offer as "unsolicited, conditional and non-binding" and said it was considering it, while still recommending the Oil Search offer, which is due to be voted on by its shareholders on July 28. It didn't reveal the identity of the rival bidder or say whether it was a cash or scrip offer.
"The non-binding proposal is subject to a number of conditions, including (among others) satisfactory completion of due diligence," InterOil said in a statement overnight.
"Consistent with its fiduciary responsibilities, the InterOil board of directors, in consultation with its legal and financial advisors, is carefully reviewing and considering the unsolicited proposal."
Oil Search's offer has been slammed by former InterOil chief executive and still significant shareholder Phil Mulacek for undervaluing the US-listed company's significant undeveloped gas resources in PNG, which include the large Elk-Antelope field that Oil Search and its ally, the French oil major Total, want to use to feed their proposed Papua LNG project.
Papua LNG would run alongside or could be integrated with ExxonMobil's $US19 billion PNG LNG venture, which started production in 2014.
Exxon has been cited by analysts as a potential rival bidder for InterOil, as has Woodside Petroleum, although Woodside chief executive Peter Coleman more recently said the company had "moved on" from its PNG ambitions after last September being rebuffed in a takeover approach to Oil Search.
InterOil said its board had taken steps allowed under the deal with Oil Search to permit InterOil to "engage in further discussions and negotiations with the third party" and noted there was no assurance any transaction would result.
"InterOil's Board of Directors does not intend to comment further on the unsolicited proposal until a transaction is negotiated with the third party or the unsolicited proposal is withdrawn," it said.
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