(Alliance News) - Amerisur Resources PLC on Monday rebuffed a USD260 million proposal from France's Etablissements Maurel & Prom SA after it put itself up for sale on Friday.
M&P, listed in Paris, has a number of assets in Africa as well as in Colombia, where Amerisur operates. It also owns 20% of Seplat Petroleum Development Co PLC, a London-listed oil producer in Nigeria.
On Friday, Amerisur started a strategic review, which could lead to a sale, after receiving interest from peers in a buoyant Colombian oil and gas market. The firm confirmed a "non-binding proposal" had been received and also said there was other interest.
Amerisur's main assets are in the Putumayo basin of Colombia, and it also has an oil pipeline into Ecuador. The firm's 12 blocks cover over 1.0 million hectares of land.
M&P confirmed on Monday, in its own statement, that it made on Thursday last week a proposal to Amerisur at 17.0 pence per share. This would be made up of 12.5p in cash, and the rest in shares.
Amerisur was 6.9% higher in early trade on Monday, at 17.66p a share. However, five years ago they were at 64.75p.
The proposal, the French oil and gas firm said, gives an equity value of USD257 million for Amerisur, and is a 42% premium to its closing price last Thursday.
However, Amerisur said the possible offer "materially" undervalues the company and was "not at a level that merited further consideration". It has urged shareholders to take no action.
"The purpose of the competitive formal sale process we launched on Friday is to maximise value for shareholders. As well as the offer from Maurel & Prom, we have had a number of additional expressions of interest in the company," said Amerisur.
"M&P sees considerable benefit to shareholders from a combination and believes the enlarged group would offer significant value upside for both Amerisur's and M&P's shareholders," M&P had said earlier Monday.
"The combination would result in a balanced portfolio of producing assets, with a wide range of high impact exploration and development opportunities across Latin America and Africa. This would allow value-adding capital allocation decisions, benefiting from M&P's access to both flexible and low-cost debt and to capital markets."
"M&P is committed to Colombia, having been present in the region since 2005, and has successfully demonstrated its ability to unlock value in the country. Between 2005 and 2013, M&P discovered, developed and monetised a number of assets across multiple basins in-country, generating USD909 million in cash proceeds," it continued.
"M&P believes the proposed combination would enable M&P to leverage its operational expertise on Amerisur's promising portfolio of development and exploration opportunities. M&P has proved itself as a successful explorer and developer of oil and gas assets across a variety of terrains and geological settings across Latin America and Africa."
M&P, which would fund the deal from existing cash and undrawn debt, would try and list on the London Stock Exchange should the acquisition go ahead, within three to six months.