Conoco Canada makes $329 million bid for Gulf Indonesia minority stock

By OGJ editors

HOUSTON, May 28 -- Independent directors will recommend that Gulf Indonesia Resources Ltd.'s full board approve the $329 million offer by Conoco Canada Resources Ltd., Calgary, for all its stock not already owned by the Canadian firm, officials said Tuesday.

Conoco Canada, a subsidiary of Conoco Inc., Houston, is offering $13.25/share for that remaining stock.. It currently owns 72% of Gulf Indonesia, based in Jakarta. Acquisition of the minority interests will allow Conoco to optimize its operations in Southeast Asia, officials said.

A special committee of Gulf Indonesia's independent directors was formed Apr. 1 in anticipation of the cash offer submitted by Conoco Canada on May 24. The committee's recommendation is based on a number of factors, including an opinion from financial advisors that the offer is a fair one for minority shareholders, officials said.

Conoco Canada's cash offer represents a 74% premium over the May 25 closing price for Gulf Indonesia's stock—1 day before Conoco announced its proposed acquisition of Gulf Indonesia's parent—and a 21% percent premium over the stock's average closing price for 30 days prior to the proposal, they said.

Conoco Canada is the former Gulf Canada Resources Ltd., which held 72% of Gulf Indonesia's outstanding common shares when Conoco acquired the Canadian company for $6.9 billion last year.

Conoco Canada's cash offer for the minority stock is subject to customary terms and conditions, including tender of most of those shares, approval by Gulf Indonesia's directors, and execution of definitive documentation.

The special committee's recommendation will be considered at a board meeting to be scheduled shortly. Gulf Indonesia's board is comprised of 11 directors, including 7 affiliated with Conoco or Conoco Canada.