- Warrego released its target’s statement today (30 December) in relation to Hancock’s revised takeover offer.
- The company also received Strike’s first supplementary bidder’s statement.
- Strike’s current share price reflects a 14.3% premium over Hancock’s offer for Warrego shareholders.
Warrego Energy Limited (ASX:WGO) has been in the limelight for the past few months. The Australia-based oil and gas company has received offers for its proposed acquisition by more than one potential party.
Since mid-September 2022, Strike Energy Limited (ASX:STX) has been eyeing to acquire all of the shares in Warrego Energy Limited (ASX:WGO) under a scrip takeover offer. At the same time, Warrego Energy has been under discussions with Hancock Energy (PB) Pty Ltd (a wholly owned subsidiary of Hancock Prospecting Pty Ltd) concerning an unconditional cash takeover offer.
On 30 December 2022, Warrego Energy shared its target’s statement concerning the Hancock offer. Moreover, the company received the first supplementary bidder’s statement from Strike.
A glance at Hancock and Strike takeover bids for Warrego
Hancock offer: an unconditional off-market takeover offer for all the Warrego shares for a cash price of AU$0.28 per share.
Strike offer: an off-market takeover offer to acquire all Warrego shares for scrip consideration of 1 Strike share for each Warrego share.
Strike's proposed takeover offer based on its closing price on 29 December was AU$0.32 per Warrego share, representing a 14.3% premium to Hancock's revised offer of AU$0.28 per share.
Warrego Energy’s target’s statement mentioned that the current implied value of Strike shares indicates a significant premium above the Hancock offer of AU$0.28 per Warrego even though it is accepted that the price of the Strike shares has been fluctuating over time and that the implied value of the Strike offer will vary depending on the price of the Strike shares at any chosen time.
In accordance with the above findings, Greg Columbus, Chairman of Warrego, recommended shareholders to reject the revised Hancock offer and accept Strike’s scrip offer in the absence of a superior bid. However, other Warrego Board members have suggested shareholders to accept the Hancock offer in the absence of a superior proposal.
What to expect from Strike’s takeover bid for Warrego?
As highlighted by Warrego, by accepting the Strike takeover offer:
- Warrego shareholders are likely to benefit from potential future growth brought on by the expansion of Warrego's current assets and their integration with Strike's assets.
- Any gains from Warrego's Spanish Assets will be shared by shareholders.
- Strike’s capacity to negotiate gas sales agreements for the merged business without requiring a gas balancing agreement between the EP469 joint venture members offers potential for gain for shareholders.
- The combined operations of Warrego and Strike are expected to result in a more significant resource and energy firm with Strike shares having an improved equity market presence, increased liquidity, and perhaps a better institutional share register.