Perth-based oil and gas exploration company Tomahawk Energy Ltd has revised its options offer in its $20m friendly takeover bid for Sydney-based oil and gas explorer K2 Energy Ltd, following a period of due diligence.
Tomahawk had previously offered to issue three new options for every seven held in K2, revising it today to a one for two offer.
The original share offer, of six Tomahawk shares for every 10 held in K2, still stands.
The companies announced their intention to merge last month, in order to hasten the expansion of their interests in the United States.
The full text of a joint company announcement is pasted below
The Directors of K2 Energy Ltd and Tomahawk Energy Ltd ("Tomahawk") are pleased to announce that K2 Energy has completed its legal due diligence on Tomahawk's US oil and gas interests in relation to the proposed merger with Tomahawk.
Following the completion of the due diligence process it was agreed by Tomahawk and K2 Energy that the terms of the merger would be amended as detailed below.
Under the revised merger terms Tomahawk will offer:
- 6 new Tomahawk fully paid ordinary shares for every 10 fully paid ordinary shares in K2 Energy; and
- 1 new Tomahawk option, with an expiry date of 30thSeptember 2009, exercisable at 20 cents for every 2 options currently held in K2 Energy.
Application will be made for the new Tomahawk shares and options issued under the Offer to be quoted on ASX.
A total of approximately 51.6m shares and approximately 28m options will be issued by Tomahawk to the shareholders and option holders of K2 Energy as part of the merger. On completion of the merger Tomahawk's approximate capital position will be as follows:
| Shares | 118,095,000 |
| Listed Options | 40,498,000 |
| Unlisted Options | 1,350,000 |
K2 Energy Limited directors advise that subject to the receipt of a satisfactory Bidder's Statement they intend to recommend the offer, in the absence of:
- a superior proposal; and
- a Tomahawk Prescribed Occurrence occurring before the end of the offer period
In late February we advised Tomahawk's Bidder's Statement and K2 Energy's Target Statement were expected to be mailed to K2 Energy shareholders and option holders by late March 2007. It is now expected that these statements will be mailed to shareholders and option holders in mid April 2007.
It is anticipated that the merger will be completed within 60 days.
