Warrego (ASX:WGO) receives bidder’s statement from Hancock, shares fall

Highlights

• Warrego received an off-market takeover offer from Strike on 19 December.
• Today (20 December), Hancock submitted its third supplementary bidder’s statement.
• Following the news, Warrego’s shares were trading 1.526% lower on the ASX.

Australian oil and gas company Warrego Energy Limited (ASX:WGO) announced via an ASX filing today (20 December) that in relation to yesterday’s Strike takeover offer, Hancock submitted its third supplementary bidder’s statement today. As per the statement, Hancock considers its takeover offer of AU$0.28 per Warrego share to be superior to Strike’s scrip proposal.

Strike Energy Limited’s (ASX:STX) off-market takeover offer was to acquire all the Warrego shares. Strike Energy is attempting to purchase all the Warrego shares it does not already hold in exchange for the consideration of one additional Strike share for each Warrego share.

Amidst the takeover offers, shares of Warrego were trading 1.562% lower on the ASX at AU$0.315 apiece as of 11:11 AM AEDT, 20 December 2022.

A glance at the background of Warrego-Strike offer

Strike's original merger proposal to the Warrego board of directors was made on 16 September 2022 and informed to the market on 10 November 2022 by both companies. Shortly after, on 14 November, Warrego and Beach Energy Limited (ASX:BPT) entered a scheme implementation deed. Under the terms of the agreement, Beach would purchase all of the Warrego shares for an initial cash payment of AU$0.20 per Warrego share.

Hancock Energy (PB) Pty Ltd (Hancock) subsequently announced an off-market takeover proposal to purchase all Warrego shares for a cash price of AU$0.23 per Warrego share on 30 November to join the fray. After Warrego declared Hancock's initial offer to be better to Beach on 1 December, Beach revised its offer on 2 December to AU$0.25 per Warrego share.

Hancock also made a revised buyout offer on the same day for AU$0.28 in cash per Warrego share. According to Warrego's confirmation on 5 December, Hancock's revised offer was still better than Beach's.

On 7 December, Strike indicated that it intends to exchange one ordinary share of Strike for one ordinary share of Warrego, raising its ownership in Warrego to about 19.9%. Lastly, Beach decided not to match Hancock's amended offer on 9 December.

Details of Warrego takeover offer from Strike

Strike's indicated offer price for Warrego shares was AU$0.335, which is a 19.6% premium over Hancock's revised offer of AU$0.28 per share and a 44.1% premium over the stock's closing price on 9 November—the day after Strike's initial indicative offer. Additionally, it is a 61.8% premium over Warrego's 30-day VWAP and a 69.3% premium over the Warrego shares' 90-day VWAP before to the undisturbed date.