PERTH (miningweekly.com) – ASX-listed Strike Energy’s takeover bid for fellow listed Warrego Energy officially opened on Wednesday, with Strike offering one new share for each Warrego share held.

The offer implied a price of 38.5c a Warrego share, based on Strike’s last closing price, representing a 61.8% premium to Warrego’s undisturbed price, based on the 30-day volume weighted average price of Warrego shares prior to Strike announcing its first non-binding indicative offer.

Strike said on Wednesday that its offer also represented a 37.5% premium to the current 28c-a-share cash offer being made by Hancock Energy, and a 6.94% premium to Hancock’s proposed conditional offer of 36c a share in cash, if Hancock obtained a minimum 40% acceptance to its offer.

“Strike continues to believe that Strike’s all-scrip offer represents the best value for all Warrego shareholders, and that operational consolidation of Strike and Warrego will deliver significant value accretion to both Strike and Warrego shareholders,” said Strike MD and CEO Stuart Nicholls.

“The offer allows Warrego to participate in future potential upside and retain exposure to the exciting and emerging Perth basin. Should Strike achieve operational control of Warrego, Strike expects that it can accelerate, maximise and optimise the gas production, cash flow and capital, while reducing the carbon footprint of the Erregulla domestic gas project.

“Warrego shareholders have the opportunity to participate in the clear value creation we can see from this transaction. It will also provide them with access to an enhanced equity market presence, greater liquidity and a stronger share register. Regardless of the recommendation from some of the Warrego board of directors, we trust the Warrego shareholders to recognise the inherent value of their existing interest in West Erregulla and the potential enhancement to that value arising out of a combination of the two companies,” Nicholls said.

Three of Warrego’s largest shareholders, who hold a collective 32.6% of the company, have accepted Hancock Energy’s cash offer for their shares in the company while three of the company’s four directors have backed the Hancock offering over Strike’s scrip offer.