17th Mar 2015 10:13
LONDON (Alliance News) - Mosman Oil & Gas Ltd on Tuesday made a further attempt to win over shareholders in MEO Australia, encouraging them to accept the bid Mosman has made for the company and calling on the company to provide its shareholders with further information on its financial outlook and ability to continue as a going concern.
Mosman is offering one Mosman share for 10 MEO Australia shares and said in a letter to MEO shareholders the price is an average 27% premium to MEO's share price since Mosman's bidder's statement was published on February 10.
Mosman said the premium will allow MEO shareholders to cover some of the losses made in recent years, noting MEO's market capitalisation has fallen to USD9.75 million now from USD200 million three years ago.
Mosman also said the combined entity will be stronger than MEO is as a standalone entity, with a larger market capitalisation and more robust financial position, improved access to working capital, and substantially lower corporate overheads.
In addition, Mosman raised a series of points about MEO's financial position, including a warning MEO gave in its half-year report that it may not have sufficient cash to cover its planned exploration activity for the year and its later statement that it cannot provide any assurances that it would not have raise new cash or take on further debt in order to finance its exploration plans.
Mosman added MEO has failed to reveal the consequences for the company should it fail to secure joint venture partners for its exploration programme and said MEO has not disclosed a range of potential risks shareholders may face from any possible capital raising.
Mosman urged MEO shareholders to accept its offer and confirmed it has extended the offer deadline to May 8, as it announced on Monday.
Mosman shares were up 1.7% to 7.50 pence on Tuesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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