Exploration company Petroceltic has said that Sunny Hill's three pence per share offer undervalues the company.
Sunny Hill, which is owned by Petroceltic's largest shareholder WorldView Capital Management, made the offer for the company last month.
The offer had valued the share capital of Petroceltic at about £6.42m.
Petroceltic said today that it had considered the offer and had consulted with a number of stakeholders, including its lenders.
It noted that the offer provided no information on how the company would be funded during the offer period, to allow the completion of the deal.
It also said the offer did not provide any information on the proposed treatment of its senior bank facility, which, unless waived by the lenders or otherwise amended, would trigger an immediate repayment obligation in respect of all the amounts due.
"The board believes that the offer undervalues the company on the assumption of its having appropriate long term funding in place," today's statement said.
"The board therefore believes that the terms and conditions of the offer, combined with the current financial circumstances of the group, create significant uncertainty regarding the ability for the offer to be completed in accordance with its terms," it stated.
"Based on these factors the board has concluded that it is not possible to give a firm recommendation to all Petroceltic shareholders at this time to either accept or reject the offer once made," it added.
The company said its shareholders are recommended to take no action at this time in relation to the offer from Sunny Hill.
