Tap Oil has urged shareholders to reject a $29.8 million takeover bid from major shareholder Risco Energy Investments, after independent expert BDO valued the company well above the offer price.
BDO’s report values Tap at between 7.9 cents and 12 cents, with a preferred valuation of 9.1 cents.
The preferred valuation represents a 30 per cent premium on Risco's offer.
The report concludes that Risco’s offer is neither fair nor reasonable.
“We have considered the terms of the offer as outlined in the body of this report and have concluded that, in the absence of an alternative offer, the offer is neither fair nor reasonable to shareholders,” the report states.
“We consider that the offer is not fair as the value range for a Tap Oil share, on a control basis, is greater than the offer consideration.
“We consider that the offer is not reasonable due to the disadvantages of the offer outweighing the advantages.”
The independent directors also recommended shareholders reject the offer.
In May, the Tap board said the takeover bid undervalued the company and labelled it as opportunistic.
Tap Oil’s largest shareholder Chatchai Yenbamroong, who has a 25.5 per cent stake in the company, has advised he will not be accepting the offer.
Risco already has a 25.11 per cent stake in the oil and gas company, and Tap said Risco was seeking to gain control by paying a low control premium relative to recent comparable transactions.
Shares in Tap were off 1.16 per cent at 8.5 cents each at 2pm AEDT.