PERTH (miningweekly.com) – While suitors Beach Energy and Hancock Energy have been in a bidding war over ASX-listed Warrego Energy, fellow listed Strike Energy has silently amassed a near 19.9% shareholding in the takeover target.
Strike in November confirmed a confidential, non-binding indicative all-scrip merger proposal to the Warrego board, offering 0.714 of its own shares for each Warrego share held.
Additionally, if Warrego’s Spanish assets were sold, and the sale completed within 12 months of Strike obtaining control of the junior company, Strike offered to pay Warrego shareholders an additional scrip consideration for these assets.
Strike’s offer was usurped by Beach Energy, which offered Warrego Energy 20c a share in cash for their interest in the takeover target, and the distribution of any net proceeds received from the sale of Warrego’s Spanish assets, by way of a member’s scheme of arrangement. Beach Energy and Warrego Energy subsequently signed a scheme implementation deal.
Not long after, Gina Rinehart’s Hancock Energy launched a surprise 23c a share bid for Warrego Energy, prompting Beach Energy to increase its own offering to 25c a share, along with the distribution of any net proceeds received from the sale of Warrego’s Spanish assets.
Hancock Energy in turn increased its own offer price for Warrego Energy from 23c a share to 28c a share.
While Warrego Energy was holding its breath for an increased offer from Beach, Strike has secured a near 19.9% shareholding in the takeover target by entering into a share swap agreement with various Warrego shareholders, at a one-for-one exchange ratio.
Post settlement of the share swaps, Strike will become Warrego’s largest shareholder and will increase Strike’s direct and indirect ownership of the exploration permit containing the West Erregulla gasfield and near field low risk upside, to approximately 60%.
“Strike has a strong track record of identifying and securing valuable and strategic energy assets at various stages of maturity. The expansion of our ownership of Warrego shares and the resulting look through to an increased economic interest in the West Erregulla gasfield is a further demonstration of this,” said Strike MD and CEO Stuart Nicholls.
The share swap settlement is expected to occur within the next week.