The Norwest Energy board has recommended its shareholders reject Mineral Resources’ takeover offer, claiming the $403 million bid was “opportunistically timed”.
The board of ASX-listed oil and gas company Norwest Energy has recommended its shareholders reject Mineral Resources’ takeover offer, claiming the $403 million bid was “opportunistically timed”.
Norwest Energy today announced on the market its directors unanimously recommend shareholders reject Mineral Resources’ takeover bid, which was announced in December.
In the ASX statement, the Norwest board said MinRes was seeking to secure control of Norwest and its Perth Basin assets without paying an appropriate premium for control.
The Chris Ellison-led lithium and iron ore miner announced it was offering one MinRes share for every 1,367 Norwest shares, working out to be 6 cents per share and a $403 million price tag on the target.
MinRes is Norwest’s biggest shareholder with a 19.9 per cent stake in the company, and a joint venture partner in the Lockyer Deep gas project in the Perth Basin.
“The unsolicited offer does not appropriately value Norwest’s Perth Basin assets and has been opportunistically timed prior to the full extent of the Lockyer discovery becoming known,” the board said on the ASX.
“By accepting the offer and becoming a MinRes shareholder, shareholders reduce their exposure to the Lockyer project and adjacent exploration upside, while increasing their exposure to the risks associated with MinRes’ other businesses and commodities.”
The update comes after Mineral Resources bought 15 per cent of Warrego Energy at 35 cents per share in an off-market deal last week.
The bidding war for Warrego has escalated in recent months after Beach Energy, Strike Energy and Gina Rinehart’s Hancock Prospecting setting their eyes on the Perth Basin gas play.
Strike Energy flagged a scrip-based takeover offer for Warrego in November at 18.6 cents per share, representing about $227 million.
Hancock Prospecting’s offer at 36 cents per share, valuing Warrego at $447 million, is the latest takeover bid at more than double the first offer by Strike in November.
In its ASX statement, Norwest said shareholders might be unable to accept a superior proposal if they accept MinRes’ offer.
“As a stand-alone ASX-listed entity, Norwest provides investors with one of the few available opportunities to acquire meaningful exposure to what are expected to be compelling Perth Basin gas economics,” the board said.
“The tax outcomes of accepting the offer may be disadvantageous to you, particularly if the requirements to obtain scrip-for-scrip rollover relief are not satisfied.”
Norwest Energy was advised by Euroz Hartleys and Corrs Chambers Westgarth.
