15th Sep 2015 06:43
LONDON (Alliance News) - Nostrum Oil and Gas PLC Tuesday said its takeover offer for Tethys Petroleum Ltd has "not yet been accepted" by the company despite extensive talks between the pair.
Nostrum said it is confident of reaching a deal in the near future, with the hope of completing one before the end of 2015, as it reiterated its latest offer despite the continued "erosion" of Tethys' value.
The FTSE 250-listed oil and gas company had already made a previous offer of CAD0.2185 per Tethys share back in August. Later in August, Nostrum said it "would be prepared to make an offer" at a price of CAD0.147 per Tethys share.
Nostrum lowered its potential offer for the company following a due diligence review of Tethys and its business and in light of the recent Kazakh tenge devaluation and change in macro-economic conditions.
However, after that revised offer, Tethys called the approach "highly conditional" and said it would reopen its review of strategic options and talk to several other interested parties.
Both offers made by Nostrum also included the potential for Nostrum to supply interim funding to Tethys.
On Tuesday, Nostrum said: "Since then, Nostrum has engaged in discussions with Tethys with the view to reaching agreement on the terms of a proposed transaction under which the board of Tethys would be able to recommend the proposed offer to Tethys shareholders."
"Although discussions have been constructive, the board of Nostrum believes that the expectations of the board of Tethys, in particular as to the terms of the interim funding, are unrealistic given the current financial circumstances and situation of Tethys. As a result, Nostrum and Tethys have been unable to reach agreement as to the terms of the proposed transaction," it added.
Nostrum said Tethys' underlying financial position has "continued to deteriorate" and said there has "continued to be an erosion of Tethys' value".
Nostrum said it has reiterated its CAD0.147 per Tethys share and said it is "confident" of the pair reaching an agreement "shortly". Nostrum said any deal would hopefully be completed before the end of December, but warned any further delays will further hit the value of Tethys.
Nostrum also stressed it can withdraw its offer at any time, and said the announcement is not a firm intention to make an offer.
By Joshua Warner; [email protected]; @JoshAlliance
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