21/12/2017 - 10:44

MinRes revises $526m AWE takeover

21/12/2017 - 10:44

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Sydney-based oil and gas company AWE has backed a revised $526 million takeover offer from Mineral Resources as the Perth-based mining outfit seeks to gain control of the Waitsia gas field in the Perth Basin.

MinRes revises $526m AWE takeover
AWE has a 50 per cent stake in the Waitsia project in the Perth Basin.

Sydney-based oil and gas company AWE has backed a revised $526 million takeover offer from Mineral Resources as the Perth-based mining outfit seeks to gain control of the Waitsia gas field in the Perth Basin.

The Chris Ellison-led miner has secured a binding scheme implementation deed with AWE, which has a 50 per cent stake in the Waitsia gas field.

The offer comes after MinRes launched a $484 million takeover bid on December 11, days after a Chinese-backed energy company made a hostile $463 million offer for AWE.

Under the revised deal, the implied value is 83 cents per AWE share with AWE shareholders able to receive a 50-50 combination of cash and MinRes shares, or a maximum cash or maximum share consideration under a mix and match facility.

AWE shareholders will receive 41.5 cents in cash and between 0.0198 and 0.0277 MinRes shares for each AWE share.

The allocation ratio of shares to cash is subject to scale back to ensure the total transaction consideration paid is 50 per cent cash and 50 per cent scrip.

The offer is subject to an independent expert report.

The directors of AWE have unanimously recommended shareholders vote in favour of the scheme.

Mr Ellison said the purchase was a logical addition to MinRes’ asset portfolio.

“The acquisition of AWE, including its 50 per cent interest in the Waitsia Gas Project, is logical and on-strategy for MinRes,” he said

“MinRes has a strong desire to develop this tier one gas asset to form a key pillar of the MinRes business over the next 20 to 30 years.

“We expect to also be able to provide gas to a wider range of end power users, displacing diesel and providing a range of benefits to the Western Australia economy.”

AWE this week raised the reserve estimate at Waitsia by 80 per cent to 820 petajoules and has touted it as the largest onshore gas discovery in Australia in 40 years.

AWE chairman Kenneth Williams said the acquisition represents a highly attractive opportunity for AWE shareholders.

Macquarie Capital and Gilbert + Tobin are advising MinRes while UBS, Highbury Partnership and Allens are advising AWE.

AWE shares were trading at 85 cents, down 3 per cent, at 1.15PM AEDT while MinRes shares were up 2.7 per cent at $19.78. 

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