Sydney Morning Herald: Oil Search Likely to Reject Woodside $11.6b Takeover Offer

One of the most successful gas producers in Asia, Sydney-based Oil Search, is likely to reject an $11.6 billion takeover offer from West Australian rival Woodside Petroleum, which wants to use the collapse in energy prices to build a global gas network.

The all-share bid, which would be the largest Australian takeover since 2011, dramatically undervalues its liquefied natural gas assets in Papua New Guinea, sources close to Oil Search said.

Woodside wrote to the company on Friday with an offer of one Woodside share for four Oil Search shares, implying an offer price of $7.65 a share.

Oil Search chairman Rick Lee briefly spoke with Michael Chaney, his Woodside counterpart, on Monday.

Woodside was then forced into prematurely announcing details of the offer following revelations about the deal by The Australian Financial Review's Street Talk column. MORE