hardman bid generous as they come

Hardman bid 'generous as they come'
Email Print Normal font Large font November 16, 2006

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AdvertisementLONDON'S Tullow Oil is in the home straight with its $1.47 billion takeover bid for Hardman Resources after an independent expert found the offer was as generous as they come.

The expert, KPMG Corporate, valued Hardman shares in a range from $1.02 to $1.48, or $1 to 54¢ a share less than Tullow's friendly $2.02-a-share offer, with a limited share alternative also on offer.

The expert said the prospect of an alternative offer emerging could not be discounted.

But there was also "significant" doubt that an alternative could be more attractive than that on offer from Tullow.

Some long-time supporters of the stock have argued that the bid does not reflect the long-term exploration upside of the group's interests off Mauritania, and the merging potential of its oil discoveries in Uganda.

But much of that goodwill was eroded by the poor performance of the Woodside-managed Chinguetti oil project, 19 per cent Hardman owned.

Chinguetti was meant to be producing 75,000 barrels of oil a day, but has struggled to produce 30,000 barrels.

Woodside has also flagged that proved and possible reserves of 123 million barrels of oil are likely to be downgraded.

Hardman chairman Bob Carroll said yesterday that the cash bid from Tullow was at a compelling premium to the price at which group's shares were trading before the September offer, which he said would deliver greater benefits than any alternative.

Hardman shares, which have been trading higher than $2.02 cash bid in response to the higher imputed value of the share offer (0.22289 of a Tullow share for each Hardman share), fell 5¢ to $2.06 yesterday.

BARRY FitzGERALD