It has made a paper offer, one Mosman share for every 20 MEO shares, which is worth about £6.5mln or A$12.4mln.
Mosman says the combination of Mosman and MEO will deliver benefits to both sets of shareholders as the merged group would be an attractive investment proposition.
It adds that by being listed on AIM, Mosman has exposure to one of the largest global investment communities and the company has created considerable investment interest since it listed earlier in 2014.
MEO is already the subject of a takeover bid but, according to Mosman, a separate dispute between the rival bidder and its major shareholder raises questions over that deal going through.
Evoworld Corporation owns just shy of 20% of Neon Energy, which has already entered into a merger agreement with MEO. The shareholder has, however, called for a general meeting in order to remove Neon’s management team.
John Barr, Mosman’s executive chairman, said: “The Mosman directors believe that there is a strong possibility that the proposed merger between MEO and Neon will not occur, and that the takeover bid [from Mosman] affords the MEO shareholders a viable alternative.
“The Mosman directors believe that the combined resources of Mosman and MEO will deliver benefits to both shareholder groups and establish an expanded company as an attractive investment proposition for investors."