hardman runs hot Hardman runs hot MANDI ZONNEVELDT 603 words26...

hardman runs hot Hardman runs hot
MANDI ZONNEVELDT
603 words
26 September 2006
Herald-Sun
1 - FIRST
31
English
Copyright 2006 News Ltd. All Rights Reserved
SHARES ROCKET ON $1.5b BID

Resources

BRITISH oil company Tullow has made a $1.5 billion cash bid for Hardman Resources, sending shares in the local producer soaring almost 60 per cent as punters gamble on a rival offer.

The Hardman board has recommended the Tullow bid of $2.02 a share and has agreed not to go shopping for offers, but analysts said the "for sale" sign was out.

Stock Resource analyst Steve Bartrop said the jump in Hardman's share price, from a close of $1.31 on Friday to $2.04 yesterday, suggested the market was looking for another bid or a higher offer. He said Woodside Petroleum, Hardman's partner in the giant Chinguetti oil project in Mauritania, might look at the company.

Fat Prophets resources analyst Gavin Wendt said Hardman was likely to attract interest from independent oil companies in Britain and the United States.

He said British Gas might be a buyer, suggesting it could be interested in Mauritania's gas reserves as a longer-term play.

Hardman shares had fallen sharply from a high of $2.50 in April on concerns the reserves at Chinguetti could be cut by as much as 50 per cent, and the lower price of oil.

Woodside is reviewing the Chinguetti project, with an update on reserves due before the end of the year.

Mr Bartrop said he did not expect a rival bidder to emerge until the results of that review were released.

Shareholders are due to vote on the Tullow deal in mid-December.

Tullow chief executive Aidan Heavey said yesterday the size of his company's offer meant there was little likelihood of a competing bid.

"The best way to get a deal done is to offer the top price," he said.

He denied Tullow had sought to cash in on the recent fall in Hardman's share price.

"Hardman had been on our radar. We've always liked the blend of assets that they've had," he said.

"I think the price would have been the same regardless of what their share price was."

Chinguetti is Hardman's only producing asset, but it has exploration targets in Uganda, Tanzania, Guyana and the Falkland Islands.

Tullow is Hardman's partner in the Ugandan project and has interests in other African countries, including Mauritania.

Tullow has also offered a share alternative to investors in Hardman looking to keep an interest in the oil and gas junior's projects.

Hardman shareholders can elect to receive 0.22289 Tullow shares for each Hardman share they own, subject to a maximum of 65 million new Tullow shares. The new shares will be traded on the London Stock Exchange.

Hardman chief executive Simon Potter said the offer captured "potentially several years of the risked upside in (Hardman's) portfolio".

"Further, it provides investors with the choice of certain value now via a cash offer, or, through the scrip alternative, retaining exposure to the Hardman asset inventory with additional leverage offered by an exploration and production company of substantially greater scale."

Hardman has agreed to a "no shop, no talk" clause in its deal with Tullow and will pay a $14.7 million break fee if the takeover fails.

Mr Potter said Hardman had been approached in the past but had not been presented with offers that were "sufficiently serious that would cause us to go off and meet with them".

Asked whether he thought other companies might look at Hardman, he said: "I'd say it's an attractive company."

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