Medco May Sell Assets, Cut Staff After Takeover

Medco Energi International said Wednesday it may sell some assets and lay off staff at Novus Petroleum if it successfully takes over the Australian energy company.

"At this moment, Medco isn't in a position to determine how many people would be laid off," the company said in an announcement to shareholders outlining its plans for Novus. Medco also didn't specify which Novus assets it would look to sell.

Medco said it hopes to merge the Australian company into Medco's group of business, and plans to delist Novus' shares from the Australian Stock Exchange, if its bid is successful.

The announcement comes after Medco last month launched a surprise A$1.74-a- share takeover bid for Novus, valuing it at A$326 million.

Novus' management subsequently made a counter offer valuing the company at A$ 331 million.

The management buyout group, lead by Hong Kong-based investment banking group Crosby Capital Partners in partnership with Bob Williams, chief executive of Novus, has bid A$1.77 a share for the company.

Williams said this week he was confident that Japan's Mitsui & Co. will also back the management buyout.

Medco's financial director Sugiharto said the company is now evaluating the latest developments.