HDR hardman resources limited

mauritanian minnow in play

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    Mauritanian minnow in play

    Energy Review


    Tuesday, October 07, 2003
    Fusion Oil, minor partner in the Chinguetti oil discovery in Mauritania, is in play after Sterling Energy last week launched a £40m hostile takeover bid for the West Perth-based, AIM-listed company. The market is expecting a counter bid from one of as many as six white knights but as yet none has emerged.


    Sterling's has offered 3.5 Sterling shares for each Fusion share, or 2.5 Sterling shares and 10p cash for each Fusion share. This values the bid at around 40.5p per Fusion share with the most recent trades slightly weaker at 39.5p

    Sterling has production in the Gulf of Mexico and is interested in taking on Fusion's portfolio of exploration properties, particularly in west Africa. Fusion's board has rebuffed the takeover on the grounds that it undervalues the company.

    Market speculation named potential counter bidders as Mauritanian partner, Dana Petroleum or Ramco Resources. Sterling lays claim to 29% of the Fusion stock, providing a higher bid does not emerge.

    'Fusion chairman, Peter Dolan, said the unsolicited offer from Sterling took little account of the true value of Fusion or its future prospects.

    "The Fusion Board believes that the majority paper offer substantially undervalues the company. The offer in its current form dilutes Fusion shareholders' exposure to the company's drilling program. Shareholders are encouraged to take no action at this stage," he said.
 
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