time running out, page-2

Is it all over red rover
KPMG has revised down its controversial valuation of Incremental Petroleum, but not enough for the takeover target to change its rejection of Cooper Resource’s hostile bid. And it seems the Australian Securities and Investments Commission will not intervene in the battle after all.

Just two days before the expiry of Cooper’s bid, which currently values Incremental at around $1.09 a share, KPMG, in a supplementary independent experts report, has reduced its valuation of Incremental from a range of $3.39 to $4.18 to a new range of $2.41 to $3.05.

KPMG cited plunging oil prices and exchange rates, as well as the market volatility for the change, but it still found Cooper’s bid to be neither fair nor reasonable.

Incremental’s directors maintained their rejection of Cooper’s bid, and also hinted that it would give the same treatment to a possible cash offer of $1.05 a share from one of its joint venture partners TransAtlantic.

Cooper has also failed to convince ASIC to intervene in the dispute, despite the corporate regulator signalling earlier this week it may ask the Takeovers Panel to allow Cooper’s to extend the bid to give Incremental shareholders extra time to consider the revised KPMG report.

After receiving advice earlier this week from ASIC that it might approach the panel, it is understood ASIC finally decided against it on Wednesday.

Cooper’s now finds itself with little likelihood of success, with no support from the target and no time to compete with any emerging TransAtlantic offer. It said shareholders should be “horrified” by the action of directors in revealing such a late change in valuation.

The first KPMG report was prepared by KPMG executive directors Jason Hughes and Duncan Calder and other KPMG staff in return for a fee of $110,000. The supplementary report, prepared at a further cost of $50,000, was prepared by Hughes and Calder, but with Diana D’Ambra also given an authorship credit.