29/01/2018 - 07:09

Mitsui trumps rival AWE bidders

29/01/2018 - 07:09

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Japanese group Mitsui & Co. has announced a surprise $600 million takeover bid for AWE, trumping two existing bids for the oil and gas producer, with the main attraction being AWE’s Waitsia gas project north of Perth.

Mitsui trumps rival AWE bidders
AWE owns the Waitsia gas project north of Perth.

Japanese group Mitsui & Co has announced a surprise $600 million takeover bid for AWE, trumping two existing bids for the oil and gas producer, with the main attraction being AWE’s Waitsia gas project north of Perth.

Mitsui has bid 95 cents per AWE share, a premium to the bid by Mineral Resources at 83 cents per share, which has been supported by the AWE board.

China Energy Reserve and Chemical Group Australia (CERCG Australia) started the bidding war for AWE, and is offering 73 cents per share.

AWE is the operator and 50 per cent owner of the Waitsia field, which is considered the largest onshore gas discovery in Australia in the past 40 years.

Mitsui’s proposal values AWE’s fully diluted issued share capital at $A602 million.

It will be non-binding until AWE terminates the MinRes takeover scheme and its directors agree to unanimously recommend acceptance of the Mitsui proposal to its shareholders.

Mitsui said it was envisaged its proposal would be implemented by way of an off-market takeover offer to AWE shareholders, conditional upon 50.1 per cent minimum acceptances.

The proposal is not subject to a due diligence condition and Mitsui has obtained Foreign Investment Review Board (FIRB) approval.

“The proposed acquisition of AWE is consistent with Mitsui’s ongoing strategy to invest in high-quality oil and gas assets in Australia,” the company said 

“In particular, Mitsui believes AWE’s interest in the Waitsia gas project has the potential to be an attractive source of future gas supply to a wide range of Western Australian gas customers.”

Mitsui, through its wholly owned subsidiary Mitsui E&P Australia, and AWE have had a commercial relationship for more than 15 years, built through their current joint venture interests in the Casino Gas Project in Victoria and Petroleum Exploration Permit 55768 in New Zealand, and previous joint venture partnership in the Tui Project in New Zealand.

Through their subsidiaries, Mitsui and AWE were also previous joint venture partners in the Cliff Head project in Western Australia and the BassGas Project in Victoria.

Mitsui has extensive interests in WA, spanning iron ore, energy, forestry, woodchips and salt production.

It is a 50:50 joint venture partner with Mitsubishi in Japan Australia LNG (MIMI), which holds a one-sixth interest in the North West Shelf Project, and approximately 14 per cent of the Browse Project. 

Mitsui has appointed Rothschild (financial adviser) and Herbert Smith Freehills (legal adviser) in relation to the AWE proposal.

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