Forum Energy says cannot make definitive recommendation on Philex bid
08-AUG-2008 Intellasia | Thomson Financial
Aug 8, 2008 - 7:00:00 AM
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Forum Energy Plc. said that, having taken advice, it cannot make a definitive recommendation in respect of the mandatory cash offer for the company from Philex Petroleum Corp (PPC).
The AIM-listed oil group had previously asked shareholders not to take action on the 13.8 million pound takeover bid from PPC, which was tabled after PPC bought a 13.94% stake in June.
But in its formal response to the PPC offer, Forum said much depends on whether the group wins the service contract under the GSEC101 licence with the Philippines Department of Energy in the third week of August. The contract is currently in its final draft.
Forum said Wednesday that if the GSEC101 licence is not converted into a service contract, the offer price is likely to represent a significant premium to the prevailing share price of Forum Energy (LSE: FEP.L -news) prior to the making of the offer.
However, if the GSEC101 licence is converted into a service contract there could be a significant uplift in the value of Forum Energy.
Forum also said that, with 43.7% of the voting rights of Forum Energy, PPC may already be in a position to exercise de facto control over the company and PPC's future plans for the company cannot be certain.
Forum added that it believes that the company has sufficient funding to pursue its strategy in the short-term but may have to consider ways to fund its mid-term needs.
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