Deltic Energy PLC (LON:DELT) has rejected a proposed takeover offer from fellow AIM-listed oil junior Reabold Resources PLC (LON:RBD) saying it significantly undervalues the business.
Reabold has proposed an all-share offer of 1.5 of its shares for each one in Deltic, which values the former Cluff Natural Resources at approximately £12.3mln or 0.87p per share.
In a statement, Deltic said the offer places no value on its significant non-cash assets and 'not least its share of two potential high impact exploration wells with partner Shell'.
The offer does not even reflect its existing cash balance (£13.2mln), added Deltic, which said it also had concerns over Reabold's investments and the West Newton project in Yorkshire in particular,
The takeover would see Reabold shareholders own approximately 76.2% of the combined group's issued share capital and Deltic shareholders approximately 23.8%.