PERTH (miningweekly.com) – The Federal Court of Australia on Tuesday approved a merger between ASX-listed Drillsearch and Beach Energy.
Under the terms of the agreement, Beach has agreed to acquire all Drillsearch shares through a scheme of arrangements, with Drillsearch shareholders offered 1.25 Beach shares for every Drillsearch share held.
The offer priced Drillsearch shares at 83c each, and valued the company at A$384-million.
Drillsearch said on Tuesday that a shareholder meeting would now be called for January 27, allowing Drillsearch shareholders to vote on the proposed transaction.
Meanwhile, an independent expert has concluded that the Beach merger proposal was both fair and reasonable, and therefore in the best interest of Drillsearch shareholders.
The independent expert report would be sent to shareholders ahead of the January meeting.
The Drillsearch board has unanimously recommended that shareholders accept the offer, in the absence of a superior proposal.
he combined group would have a 2015 production of 12.1-million barrels of oil equivalent and an expanded portfolio of oil, gas and infrastructure assets and would have a market capitalisation of some A$1.1-billion.
In addition, the combined group would be in a stronger position to take advantage of future growth opportunities as a result of increased scale and balance sheet strength.
It was expected that the combination of the two companies would realise synergies and cost savings of some A$20-million a year, with the savings principally sourced from increased operational efficiencies and the elimination of duplicated corporate and administrative functions, with Drillsearch’s corporate functions likely to be relocated to the Beach head office in Adelaide.