Energy Africa Continues To Resist Petronas Offer

Energy Africa continues to resist complete takeover by majority shareholder Petronas. The company has run a full-page newspaper ad urging minority shareholders to wait before accepting a 1.6 billion rand takeover offer. In an announcement titled "URGENT MESSAGE...Why you should wait", the South African oil group said its directors who owned group stock would reject the 43.75 rand per share surprise offer made last Thursday by Petronas. Energy Africa, a small company which says it is the only listed dedicated oil production and exploration group on the continent, said the bid did not fully value the company.

Petronas has increased its stake since launching the offer, leaving minority shareholders with just under 35 percent. Its purchase of Energy Africa shares has helped them rise above the offer price to 46 rand as of Wednesday morning, an increase of 4.5%.

In the advertisement, Energy Africa said Petronas was yet to post its offer document to shareholders, adding the Malaysian group had until October 5 to do so. Shareholders had 21 days from the day the offer was formally issued to consider it. Petronas cannot withdraw its offer until the three weeks have passed. "Your Board is determined to achieve maximum value for Energy Africa shareholders. Your Board, together with its advisers, is examining all options to maximize value for Energy Africa shareholders," the group said.

At the time of the offer, Petronas said it had held talks with Energy Africa's directors and management about liquidity, scale and funding requirements, but Energy Africa said the bid was unsolicited. Despite the objections of the South African group, Petronas bought 8.8 million more shares in the market on Friday, pushing its control of the company to 65.3 percent. Before the bid, Petronas International's 80 percent-owned subsidiary Engen held 56.7 percent of Energy Africa.