Neon Energy has backed out of a merger agreement with MEO Australia after Evoworld Corporation agreed to make a revised off-market takeover offer for 50 per cent of the shares it doesn’t already own in the oil and gas producer.
Evoworld will offer Neon shareholders 3.8 cents for every share they own in exchange for a 50 per cent holding in the company.
“Having carefully considered the terms of Evoworld’s proposal, the board of Neon have unanimously determined that the offer constitutes a superior proposal to the merger with MEO Australia,” Neon said in a statement.
As a result, Neon has ended its merger agreement with MEO and has paid a $400,000 reimbursement fee.
As part of the takeover proposal, Evoworld appointed Timothy Kestell and Peter Pynes to Neon’s board as non-executive directors, replacing John Lander, who resigned from the role today.
“In addition, once Evoworld acquires 30 per cent of the Neon shares on issue and the offer becomes unconditional, Ken Charsinsky will resign from the board and Ross Williams will be appointed as a non-executive director,” Neon said.
Neon has recommended the offer to its shareholders in the absence of a superior proposal.
Evoworld first placed an unsolicited proportional takeover offer to Neon in September, however, chairman Alan Stein warned the company’s shareholders that Evoworld’s intentions were unknown and, as a result, recommended they take no action.
He said Evoworld may only be interested in gaining control over the company’s cash assets.
The offer is still subject to shareholder approval.
Shares in Neon were 2.9 per cent higher at 3.5 cents per share at the close of trade.
