by Chris Becker
The commodities consolidation phase is on, as Woodside Petroleum (WPL) takes advantage of lower oil prices to make a bid for Oil Search (OSH)
From the Oz:
The bid, of one Woodside share for every four Oil Search values the target at $11.6 billion, or $7.65 a share, based on yesterday’s closing Woodside closing price of $30.58. This is just a 14 per cent premium and unlikely to excite Oil Search shareholders.
Oil Search has a big stake in the Exxon-run PNG LNG plants – one of the most profitable LNG outfits in the world – a strong balance sheet and decent growth options, so it’s hard to see the obvious attraction of the bid.
The bid also needs the approval of the PNG Government, which is a 13 per cent shareholder in Oil Search and regards the Port Moresby-based company as something of a national champion.
No, not a big premium to market value but we’re not in a bull market are we? This probably won’t get much traction but shows, like Glencores troubles that the consolidation phase in the natural, normal and not unusual bear market in commodities is underway. The bottom is coming, but not yet.