Novus grumpy at Petroz rejection

Petroz last week said the takeover offer of one Novus share for every 3.75 Petroz shares did not reflect fair value of the shares, and did not include a fair premium for control of the company.

Petroz said while it would remain open to an increased offer from Novus or any other company, it would move ahead with plans for a rights issue. Money from the rights issue will be used to help develop the energy reserves in the world class Bayu-Undan Project in the Timor Sea.

However rejected suitor Novus has cautioned Petroz shareholders to be wary of the proposed rights issue.

"The decision facing Petroz shareholders is clear - a rights issue requiring additional investment by shareholders versus a fair and equitable scrip offer from Novus," says Novus MD Bob Williams.

"Even if Petroz can secure an underwriter and complete the rights issue, shareholders would need to contribute cash and non-participants would face a dilution in the value of their stock."

"Novus is of the view that the rights issue being proposed by Petroz is high risk for shareholders and will not solve the long-term capital needs of the company. Petroz shareholders should also be aware that a successful equity raising will not necessarily ensure the debt funding will be forthcoming."

Novus is also taking issue with a new report by corporate adviser Grant Samuel which says Petroz shares are worth between A$0.58 to A$0.74 per share.

Mr Williams claims most of Petroz' increased value is due to the current weakness in the Australian dollar and says it questions the use of the current exchange rate in valuing a project with a life of over 20 years.

"Novus considers that its offer for Petroz reflects a full and fair valuation and looks forward to Petroz providing clarity in relation to its boards' recommendation to shareholders."

New Zealand energy company, Fletcher Energy, holds 13% of Petroz.

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