Oil Search Ltd. rejected Woodside Petroleum Ltd.’s $8 billion takeover bid, saying the proposal undervalues the company’s liquefied natural gas expansion plans in Papua New Guinea.
“The feedback we got from all the major shareholders we consulted with confirmed that the proposal was one that should be rejected,” Oil Search Chairman Rick Lee said on a conference call Monday. “The proposal on whatever basis you apply was significantly undervaluing Oil Search and certainly not one that encouraged us to consider it further.”
Woodside’s bid of one share for every four Oil Search shares, which implied a 14 percent premium, was too low to win investors’ support, according to Sanford C. Bernstein & Co. and UBS Group AG. The offer last week valued Oil Search at A$11.65 billion ($8.1 billion) and would have been the biggest energy takeover in Asia. Oil Search fell as much as 3.1 percent to A$7.22 in Sydney trading, while Woodside slid as much as 3.5 percent to A$27.43.