Salamander sparks a takeover tussle with its £500 million swoop for Serica

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Salamander, the FTSE 250 company which has exploration and production assets in Indonesia, Thailand and Vietnam, has tabled plans for a £500 million merger offering its shares on a one-for-three basis for Aim-listed Serica, a UK and Ireland explorer which is also drilling in South-East Asia.

The all-share offer valued Serica at £124 million, or 70p a share, a premium of more than a fifth to Friday's close but well shy of the 108p it was at in summer.

Having given Serica 48 hours to respond and having got a rejection, Salamander went public today, saying it would appeal directly to Serica's shareholders.

Caledonia Investment and Fidelity together own more than 25% of Serica. Serica's shares today leapt 11p to 68p while Salamander was marked down 13½p to 196½p.

Serica chairman Tony Craven Walker, an industry veteran of several takeovers, said the Serica board had dismissed the offer because of the uncertainties of an all-share offer during a general sell-off of oil stocks.

"Its very opportunistic and crazy really," he said. "We are quite happy to talk to anyone but going about this the way they have is very strange."

Salamander chief executive James Menzies, who has just completed the £106 million takeover of another South-East Asian play, GFI, defended his apparent rush to do a deal.

"We know each other well, we are a young and ambitious company and we don't want the grass to grow under our feet," he said.

Salamander said a deal would give it proven and probable reserves of 75 million barrels and a production rate of 19,000 barrels a day in 2009.

Serica house broker JPMorgan Cazenove said the offer is "completely ignorant" of Serica's underlying value.