Shares in Amerisur Resources (LSE:AMER) continued to rise on Monday morning, hitting 17.66p as investor anticipation around a bidding war for the Colombia-focused oil & gas business hit new highs.
The firm was trading 6.9pc higher following the news that it had received a takeover bid from Paris-based exploration player Maurel & Prom (M&P) valuing it at about $257m. M&P’s offer values Amerisur’s shares at 17p each, comprising 12.5p in cash and new shares in M&P worth 4.5p. This represents roughly a 41.7pc premium to Amerisur’s 12p share price on 17 July, two days before it announced that it had launched a formal sale process after receiving multiple expressions of interest in its assets. This move prompted a 37.6pc increase in Amerisur’s share price, pushing it to highs not seen since March this year.
In an update on Monday morning, M&P said that its deal would enable Amerisur’s shareholders to ‘realise immediate cash’ and benefit from having a ‘platform of significantly greater scale, as well as experienced and focused management across the entire E&P value chain, from exploration, development, production through to field optimisation.’ The Euronext-listed firm added that it would look to list on the London Stock Exchange’s Main Market within six months of any successful bid to ensure Amerisur’s investors retain exposure to a UK-listed entity.
However, in a corresponding statement, Amerisur said that M&P’s offer, which was made immediately after it launched its sale process on Friday, ‘materially undervalued’ its operations. As such, the business added that it did not merit further consideration in its current form. Amerisur said it had entered discussions with numerous potential bidders since announcing its intention to sell, adding that it would still consider any future proposal put forward by M&P. A spokesperson for the business said:
‘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.’
Likewise, the firm said it was ‘confident’ that a competitive process involving several potential counterparties can be ‘completed to the benefit of all shareholders’.
With Amerisur’s share price surpassing 17p, its value under M&P’s bid, it appears that the market is equally confident in the company’s ability to secure a bid on more attractive terms. It will now be interesting to see what comes of the various discussions that Amerisur claims to have entered. With the organisation’s market cap already sitting at £200.8m as at writing, there could be much more upside to come relative to M&P’s offer.
Amerisur Resources is an experienced Colombian operator with an extensive, strategic acreage position in the underexplored Putumayo Basin with Occidental Petroleum. It also holds a prospective block called CPO-5 in the Llanos Basin with ONGC. Critically, Amerisur is the 100pc owner and operator of the OBA pipeline, which delivers oil from the Putumayo in Colombia into Ecuador. As it stands, the business produces from three fields, Platanillo, Mariposa and Indico. Together, these generate cash flow to fund the business’s work programme.
On Friday, the business said that it had launched a formal review of the various strategic options available to maximise value for shareholders. This followed high levels of third-party interest and considerable levels of recent activity in the broader Colombian exploration and production sector.