Woodside Petroleum abandons $8.1bn proposal to acquire Oil Search

Australian energy major Woodside Petroleum has dropped its A$11.6bn ($8.1bn) proposal to acquire Oil Search.

The company’s latest announcement comes almost three months after the bid was rejected in September 2015 by Oil Search.

Oil Search rejected the bid after performing a detailed evaluation of the proposal and concluded that the proposal is highly opportunistic and grossly undervalues the company.

Woodside originally proposed during the same month to merge both the companies through a scheme of arrangement.

Under the proposal, Woodside proposed to acquire all shares of Oil Search at a consideration of 0.25 company shares for each Oil Search share.

Woodside said is not pursuing any alternative transactions to merge the businesses.

Commenting on Woodside’s decision, Oil Search said in a statement: "The Oil Search Board concluded that the indicative Woodside proposal grossly undervalued the company.

"Oil Search remains focused on delivering value for its shareholders, by continuing to produce from its low cost assets and progressing the development of its world class growth projects."

Oil Search holds 29% stake in the PNG liquefied natural gas project, which is being operated by Exxon Mobil.

The company also owns equity interests in fields in the area, including the Elk and Antelope gas field being developed by Total.

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Image: Woodside’s Pluto LNG onshore gas plant. Photo: © Woodside.