28th Aug 2015 15:54
LONDON (Alliance News) - Nostrum Oil and Gas PLC Friday said it would be prepared to make a new approach to takeover Tethys Petroleum, but at a much lower price than it originally offered in light of a recent review of the deal.
FTSE 250-listed Nostrum said it would be willing to make a new offer after the deadline to make its previous offer firm expired, but Tethys said it has many questions over the new potential offer and plans to talk to other interested parties, throwing doubt that a deal will be completed.
Nostrum said it "would be prepared to make an offer" at a price of CAD0.147 per Tethys share, which is drastically lower than the CAD0.2185 per Tethys share originally offered earlier in August.
Nostrum said it had revised the price following a recent due diligence review of Tethys and its business and in light of the recent Kazakh tenge devaluation and change in macro-economic conditions.
The new offer of CAD0.147 is still a 22.9% premium to the CAD0.12 closing price of Tethys shares on Tuesday, when Nostrum informed Tethys of its revised offer, it said.
In a separate statement Friday, Tethys said it had received non-binding and a "highly conditional" proposal from Nostrum.
Although Nostrum has shown its intention to make a new offer, it has not made it official and said the announcement does not mean a firm offer will be made.
However, Tethys said it has also received expressions of interest from several other parties in relation to a "variety of potential corporate transactions, all of which remain current", throwing doubt into whether any deal between Nostrum and Tethys will go ahead.
Tethys said as the period of exclusivity for the original deal had expired, it would reopen its review of strategic options and discussions with some or all of the other interested parties.
The new offer must be made firm before September 14 for the new deal to go ahead. That is a period whereby Nostrum once again has exclusivity.
"The board of Tethys is evaluating and considering the proposal and has indicated to Nostrum that it has a number of questions and clarifications, particularly given the non-binding and highly conditional nature of the proposal and the lack of any firm intention to make a formal offer from Nostrum at this stage," said Tethys.
"Tethys is continuing discussions with Nostrum in connection with a potential proposal and related financing but, as stated above, intends to pursue discussions with other interested parties at this stage," it added.
Nostrum shares closed up 1.5% to 492.50 pence per share on Friday.
By Joshua Warner; [email protected]; @JoshAlliance
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