Woodside defends bid for rival Oil Search Ltd.

CANBERRA, Australia, Oct. 5 (UPI) -- Shareholder value is not protected by raising the $8.1 billion takeover offer for rival Oil Search Ltd., the head of Australian company Woodside Petroleum said.

Oil Search, which holds a significant stake in liquefied natural gas facilities in Papua New Guinea, rejected Woodside's takeover offer in September, saying the $8.1 billion bid grossly undervalued the company and diluted growth opportunities.

Woodside Chief Executive Peter Coleman told the Australian Financial Review the bid on the table was a full-price offer in his mind.

"Offering more is dilutive to our shareholders," he said. "We are already at that balance point and we don't want to go any further."

In September, Woodside said it was "disappointed" by the rejection of its proposal. The deal would've boosted the portfolio of the Australian energy company at a time when regional demand for LNG is expected to surge.

The Asian Development Bank estimates Pacific economies will grow by an average rate of 9.9 percent this year, with Papua New Guinea helping to boost short-term overall growth with LNG.

Coleman said the PNG government would consider unloading its minority stake in Oil Search, as were some of its other main shareholders.

"Their major shareholders are picking up the phone and talking to us," he told the Australian newspaper.

Woodside is Australia's largest oil and gas company, serving as the operator of the giant Pluto liquefied natural gas project in the country. Papua New Guinea, meanwhile, is positioned as a key energy hub, helping to meet Asia-Pacific demands for LNG.