Shares in Warrego Energy jumped late today on heavy trading with Chris Ellison’s Mineral Resources believed to have joined the takeover battle for the Perth Basin gas play.
Shares in Warrego Energy jumped late today on heavy trading with Chris Ellison’s Mineral Resources believed to have joined the takeover battle for the Perth Basin gas play.
Business News has been told that MinRes bought a 15 per cent stake in Warrego in an off-market trade priced at 35 cents per share.
The sellers are believed to include Sydney-based Regal Funds Management, which held 120 million shares, equivalent to nearly 10 per cent.
MinRes and Regal have both been approached for confirmation.
Regal was one of several shareholders that had previously said it would accept Strike Energy’s scrip-based takeover offer for Warrego.
A third player bidding for Warrego is Gina Rinehart’s Hancock Prospecting, which has launched a 28 cents per share cash offer.
Hancock has acquired a 25.9 per cent stake in Warrego while Strike holds a 19.9 per cent stake.
The entry of MinRes looks likely to bust open what had been looming as a standoff between the two bidders.
MinRes is already a big tenement holder in the Perth Basin and is aiming to strengthen its hand by acquiring Norwest Energy, which is a minority investor in its Lockyer Deep project.
MinRes announced yesterday that its offer for Norwest was open for acceptances.
Intriguingly, Hancock Prospecting has a small holding in Norwest Energy.
In addition, MinRes and Hancock are joint venture partners in a proposed iron ore development at Port Hedland.
Whether they choose to work together in the Perth Basin remains to be seen.
Warrego’s share price jumped 11.3 per cent to close at 34.5 cents today.
The ASX platform shows that 26 million shares changed hands today, an unusually high volume.
That does not count the 183 million shares that MinRes is believed to have purchased in its off-market block trade, through Bell Potter Securities.
Strike’s share price was a little stronger today, up 3.1 per cent to 33.5 cents.
Strike is offering one share for every Warrego share.
The hotly contested takeover battle, which also involved Kerry Stokes-backed Beach Energy early on, has led to Warrego’s share price more than doubling in the past three months.
Perth Basin gas is increasingly seen as an attractive asset.
There have been several major discoveries in recent years, including at West Erregulla, which is jointly owned by Strike and Warrego.
The basin is close to major pipelines to carry the gas to industrial customers in the South West.
Market projections suggest there will be a shortage of gas in Western Australia’s domestic market later this decade.
