Arc management today described the timing as "inappropriate for Arc shareholders."

Tap have proposed a merger between the two firms, combining Tap's significant production in the offshore Carnarvon basin with Arc's onshore and offshore Perth Basin assets.

Arc managing director, Eric Streitberg, said today the bid was "unsolicited but not necessary hostile."

"We will be appointing an independent advisor within the next couple of days to assess the offer, when it's received, and they will report to the Board who will advise accordingly.

"We do see the merits of a larger group but whether this is the most appropriate way to achieve that, is another question." He said they had similar approaches from a number of companies in recent times.

Streitberg said the bid should not be benchmarked on the past performance of the company", referring to Arc's pre-Christmas price of under 10 cents.

"It must be benchmarked against the current assets and performance of the company," he said, which takes into account the Hovea and Cliff Head oil discoveries.