Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

On 30th January 2019, Indonesian oil and gas company <a href="https://www.smartkarma.com/entities/20844" target="_blank" data-smartkarma-citation="entities:20844:1">Medco Energi Internasional T (MEDC IJ)</a> <a href="https://otp.tools.investis.com/clients/uk/ophir_energy/rns/regulatory-story.aspx?cid=1111&amp;newsid=1229597" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://otp.tools.investis.com/clients/uk/ophir_energy/rns/regulatory-story.aspx?cid%3D1111%26newsid%3D1229597&amp;source=gmail&amp;ust=1549323364302000&amp;usg=AFQjCNGtQ4qgnqWpteJ5TVPiQ91gig56xw">announced</a> an agreement to acquire<a href="https://www.smartkarma.com/entities/22070" target="_blank" data-smartkarma-citation="entities:22070:1"> Ophir Energy (OPHR LN)</a> in a £390mn cash deal (at an offer price of £0.55/share).  
<a href="https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/OPHR/13932338.html" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/OPHR/13932338.html&amp;source=gmail&amp;ust=1549323364302000&amp;usg=AFQjCNG6gpc12wVPrrmW7D0c1ZvFIRS1zA">Medco initially made an unsolicited approach for Ophir</a> at £0.58/share on 22nd October 2018, and indicated a "willingness to consider offering Ophir's shareholders additional potential consideration via contingent value rights in relation to the Fortuna LNG asset in Equatorial Guinea (which at the time was awaiting an extension approval) subject to further analysis and due diligence". Given uncertainty that persevered on Fortuna's license extension, Medco revised its bid to £0.538/share on 20th December 2018.
On 7th January 2019, Ophir <a href="https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/OPHR/13924952.html" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/OPHR/13924952.html&amp;source=gmail&amp;ust=1549323364302000&amp;usg=AFQjCNFU9fZYN3e4hLy_KFQy8itvkZsShA">announced</a> that it was recording a $300mn non-cash impairment following the denial of the license extension for the Fortuna project by the Equatorial Guinea Ministry of Mines and Hydrocarbons. Ophir had previously written down $310mn back in September. Subsequently, Medco revised its bid further down to £0.485 on 11th January 2019 but this offer was <a href="https://www.ophir-energy.com/press-release/rejection-of-possible-offer/#accept" target="_blank">rejected</a> by Ophir's board.
Medco's latest offer of £0.55/share is a 66% premium to the closing price of £0.33 on 28 December 2018.  Ophir's board has unanimously recommended the latest offer stating that the deal offered "upfront cash value" to its shareholders and that the offer price "reflects the future prospects of Ophir's high-quality assets".
The deal is conditional on receiving 75% shareholder approval, receiving of clearances from the relevant authorities in Tanzania and Ophir not losing all or substantially all of its Bualuang interests in Thailand. It is expected that the Scheme will become effective in the first half of 2019.
Medco's offer does provide long-suffering Ophir shareholders with an okay exit in a less-than-ideal situation. Ophir's shares have been trading at or close to terms. Given Medco's numerous proposals in short succession - four in three months - a bump cannot be dismissed. And the recent disclosure of a new shareholder may warrant such an outcome. But I'd be disinclined to chase through terms.

On 30th January 2019, Indonesian oil and gas company Medco Energi Internasional T (MEDC IJ) announced an agreement to acquire Ophir Energy (OPHR LN) in a £390mn cash deal (at an offer price of £0.55/share).  
Medco initially made an unsolicited approach for Ophir at £0.58/share on 22nd October 2018, and indicated a "willingness to consider offering Ophir's shareholders additional potential consideration via contingent value rights in relation to the Fortuna LNG asset in Equatorial Guinea (which at the time was awaiting an extension approval) subject to further analysis and due diligence". Given uncertainty that persevered on Fortuna's license extension, Medco revised its bid to £0.538/share on 20th December 2018.
On 7th January 2019, Ophir announced that it was recording a $300mn non-cash impairment following the denial of the license extension for the Fortuna project by the Equatorial Guinea Ministry of Mines and Hydrocarbons. Ophir had previously written down $310mn back in September. Subsequently, Medco revised its bid further down to £0.485 on 11th January 2019 but this offer was rejected by Ophir's board.
Medco's latest offer of £0.55/share is a 66% premium to the closing price of £0.33 on 28 December 2018.  Ophir's board has unanimously recommended the latest offer stating that the deal offered "upfront cash value" to its shareholders and that the offer price "reflects the future prospects of Ophir's high-quality assets".
The deal is conditional on receiving 75% shareholder approval, receiving of clearances from the relevant authorities in Tanzania and Ophir not losing all or substantially all of its Bualuang interests in Thailand. It is expected that the Scheme will become effective in the first half of 2019.
Medco's offer does provide long-suffering Ophir shareholders with an okay exit in a less-than-ideal situation. Ophir's shares have been trading at or close to terms. Given Medco's numerous proposals in short succession - four in three months - a bump cannot be dismissed. And the recent disclosure of a new shareholder may warrant such an outcome. But I'd be disinclined to chase through terms.

Medco's "Okay" Offer For Ophir After Fortuna Setback

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Salamander Energy PLC is an independent upstream oil and gas exploration and production company focused on South East Asia.

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Salamander Energy (SMDR LN)

Medco's "Okay" Offer For Ophir After Fortuna Setback

On 30th January 2019, Indonesian oil and gas company Medco Energi Internasional T (MEDC IJ) announced an agreement to acquire Ophir Energy (OPHR...

David Blennerhassett

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