Novus talks up Petroz offer

Novus is offering Petroz shareholders one Novus share for every 3.75 Petroz shares, upping the ante for the chance to get its hands on Petroz' stake in the Bayu-Undan energy reserves in the Timor Sea.

The previous merger deal offered one Novus share for 4.5 Petroz shares but was rejected by the Petroz board for being too cheap.

Novus MD, Bob Williams, says the new offer represents a significant premium of 78% to the weighted average Petroz share price of 27.4 cents for the three months prior to 19 July 2000.

He says that was the date on which Petroz announced the proposed placement to Fletcher Challenge, which was subsequently rejected by Petroz shareholders.

Mr Williams says that by accepting the Novus offer Petroz shareholders will continue their exposure to Bayu-Undan, and will not have to contribute to an equity capital raising to fund the project.

Petroz is currently also looking at a rights issue to meet its funding requirements for the project, although Novus is pointing out that a key condition of its offer is that Petroz does not issue, or agree to issue, any shares during the period that the Offer is open.

Mr Williams says Novus' strong financial position and cash flows will allow Petroz, as part of the combined group, to meet its share of Bayu-Undan's development costs.

"Bayu-Undan's development costs could be accommodated from Novus' continuing cashflows from its assets and existing debt."

"We are confident that Petroz shareholders will favour the Novus Offer over any rights issue which would require them to invest even more money in the company."

Petroz has two weeks to deliver a reply to the Novus' bidder's statement by way of a target statement, either recommending or rejecting the offer.

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