Soco International, a London-listed oil and gas exploration and production company, has decided not to make an offer for Ophir Energy after its original all-share proposal was rejected in January.
Soco said on Wednesday that it tabled a formal proposal to Ophir’s board regarding an all-share combination of Soco and Ophir on January 17.
According to Soco, Ophir unanimously rejected its proposal on January 22, 2019.
“Soco has for some time believed that a combination with Ophir would create significant and long-term value for shareholders in both companies,” the company stated.
In light of Ophir’s subsequent announcement of a recommended all-cash offer of 55 pence from Medco in late January, Soco stated that a share-based combination with Ophir would” currently be challenging to execute and so would represent an unacceptable level of risk for its shareholders.” As a result, Soco confirmed that it would not make an offer for Ophir.
The Medco offer stands at a total of $511 million but is a sweetened one since Medco already had a $437 million (48.50 pence per share) offer rejected.
The company added that any transaction would be pursued only if it is determined by Soco’s board to be in the best interest of shareholders.
Soco still does reserve the right to announce or participate in an offer or possible offer for Ophir within six months after March 6.
The company will be able to make a new offer if the Medco offer gets withdrawn or lapses, if Ophir announces a whitewash proposal or a reverse takeover, or if there was a material change of circumstances.