Shareholders will get the chance to vote on the deal on Monday, and bosses have already told them to accept what is on the table.
But Jefferies isn’t too sure and has asked whether investors want to crystallise “today’s value” or take a chance on “tomorrow’s potential”.
“[Recent] full-year results raise our core net asset value by 6% to 55p per share but potential Mexico discovery raises price target by 15% to 60p/share with 5p/US$48m of risked Mexico value,” said analysts in a note to clients.
“Medco's increased (final) offer of 57.5p/sh offers immediate crystallization of the value added via the ‘Santos deal’.
“Almost ironically, however, Ophir's exploration portfolio has brought the prospect of further value before we even get to Africa liquified natural gas (LNG).”
Does Medco deal undervalue Ophir?
As for Monday’s vote, the number crunchers didn’t state whether they expected investors to approve the Medco takeover, but they did note that a “number of shareholders have been vocal in their view of the various offers under-valuing the assets”.
Despite upping its price target to 60p, Jefferies cut its rating to ‘hold’ (from ‘buy’) given that the shares are now not far off that figure.
Shares were broadly flat at 57.1p on Friday morning.