Tullow Oil has made a $1.5 billion counterbid for the Ugandan oil fields Heritage Oil has agreed to sell to Eni, the Italian state oil company.
Tullow Oil and Heritage each own a half share in the two fields under the terms of their exploration venture. Tullow had the right to pre-empt any offer for Heritage’s half, matching the price the bidder is paying.
Heritage, founded and run by Tony Buckingham, a former mercenary, said that the decision on whether to allow the sale to go to Tullow or to Eni would be made by the Government of Uganda.
“The Government will determine which transaction to approve in its role as final arbiter,” it said.
It also pointed out today that Eni or another bidder could raise its offer, although Tullow still has the right to match this raised bid. However, in this case, Heritage would have to pay a break fee of one per cent of its market value — which is currently about £1.5 billion.
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Heritage shareholders have until next Monday, January 25, to approve Heritage’s sale to Eni at a shareholder meeting.
If the deal is approved, Heritage expects the Ugandan government to decide shortly afterwards, allowing the deal to complete before the end of March.
Heritage reminded its shareholders that it will consider returning a proportion of the proceeds to them by way of a special dividend of between 75p to 100p per share.