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Australia's Woodside dumps $8.4 bn bid for PNG-focused Oil Search

AFP
Stocks in Australian energy sector slumped 6.35% on December 8, 2015, following decision by the OPEC oil exporters group not to cut output

Australian energy giant Woodside Petroleum on Tuesday dropped its estimated Aus$11.6 billion (US$8.4 billion) bid for Oil Search, as energy stocks crashed in Australia on plunging oil prices amid an expanding supply glut.

Woodside said it had informed the board of Oil Search it had "withdrawn its proposal to merge the businesses", without elaborating on the reasons why.

"Woodside is not pursuing any alternative transactions to combine the businesses," the firm added in a statement to the Australian Securities Exchange, three months after the bid in September that would have helped it tap into the Papua New Guinea market.

Oil Search, whose assets are mostly based in the Pacific island nation, repeated its assertion after rejecting the bid in September that the "Woodside proposal grossly undervalued the company".

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Shares in Woodside were 3.54 percent lower at Aus$27.01 in midday trade in Sydney, while Oil Search plunged 15.82 percent to Aus$6.33.

The announcement came as stocks in the broader Australian energy sector slumped 6.09 percent, following Friday's decision by the OPEC oil exporters group not to cut output, which weakened expectations of a recovery in the already soft oil price.

Fellow Australian energy firm Santos, which is in a joint venture with Oil Search in a massive PNG gas project, saw its shares sink 12.99 percent in afternoon trade.