ExxonMobil tops Oil Search bid for InterOil
(Reuters) ExxonMobil Corp. has tabled an offer to buy InterOil Corp. topping the $2.2 B deal from Australia's Oil Search Ltd., according to people familiar with the matter.
In May, InterOil agreed to be acquired by Oil Search but on 30 June, InterOil acknowledged it received another non-binding offer, even as global markets roiled in the wake of Britain's exit from the EU.
ExxonMobil's interest, which has not yet been made public by either company, is comprised of ExxonMobil stock, as well as a contingent value right (CVR), a seldom used instrument, which may give InterOil shareholders cash on a sliding scale depending on the value of a pending gas deposit discovery, the people said.
This is the same structure as the Oil Search bid, though ExxonMobil's bid is higher, the people said.
InterOil, which trades on the New York Stock exchange, is an attractive takeover target for companies looking to tap the potential of Papua New Guinea's LNG reserves, as it has a 36.5% stake in a project in the Elk-Antelope fields.
Papua New Guinea's Elk-Antelope fields could hold at least 6.2 Tcf of gas, more than enough to fill one LNG processing train.
France's Total SA, Oil Search and the Papua New Guinea government are partners in the project.
ExxonMobil also has an LNG project in the country, considered a good location due to its high-quality gas and low costs.
InterOil's merger contract with Oil Search allows for negotiations with a rival bidder to proceed if certain conditions were met, the companies said in its 30 June announcement of a conditional, non-binding bid from an unnamed party.
According to a presentation filed with the US SEC on Tuesday, InterOil received three proposals, including Oil Search's, to sell the entire company during its initial sale process.
Since the deal's announcement, InterOil's merger with Oil Search has hit other bumps. Interoil's founder and former chief executive Phil Mulacek attempted to oust InterOil's board in June, but major proxy advisor Institutional Shareholder Services (ISS) said Mulacek had "not made a compelling case for change."
Reporting by Mike Stone
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