Article by Sean Smith courtesy of The West Australian.
Gina Rinehart is winding up a record year for her diversified business empire with a deal to buy nearly half of Australian gas producer Senex Energy in a $900 million partnership with South Korea steel giant Posco.
Having asked to be dealt into Posco’s takeover in October, Ms Rinehart’s Hancock Energy will emerge with 49.9 per cent of Senex under a bid finalised by the steelmaker on Sunday.
Plans to be detailed to the Australian Securities Exchange on Monday provide for Posco’s listed international oil and gas business to buy the Brisbane-based energy company for an agreed $4.60 a share and then hand over Hancock’s stake on completion of the offer.
The takeover remains dependent on Korean and Australian regulatory approvals, as well as the endorsement of Senex shareholders.
However, the target has already backed the bid, endorsing Posco’s sweetened offer five weeks ago and giving the company access to its books.
The extended period of exclusive due diligence over Senex wound up on Friday.
Posco sees Senex’s gas reserves in Queensland’s Surat and Bowen Basins as supporting the transition to a hydrogen-based economy.
The addition of Hancock Energy as a partner could help ease any foreign investment hurdles for Posco, though the Korean group has a long and respected investment history in Australia.
It and Ms Rinehart, pictured, are already partners in the Roy Hill iron ore mine in the Pilbara, which has delivered windfall dividends to its owners this year on the back of surging iron ore prices.
The agreed offer is up 15 per cent on the $4-a-share proposal lobbed by Posco in July and includes the value of two gas fields Senex is buying from Origin Energy’s Australia Pacific LNG venture.
It is the biggest purchase by Posco International since the division was set up in 2011.
About 63 per cent owned by its parent, Posco International is focused on oil and natural gas, LNG, agribusiness and steel trading via a global network of 105 offices in 45 countries.
Its oil and gas projects are concentrated in Myanmar, Vietnam and Indonesia, though it also has a stake in Whitehaven Coal’s Narrabri mine in NSW.
The parent group is also invested elsewhere in Australia, in east coal mines, Roy Hill, and a lithium joint venture with Pilbara Minerals in north west WA.
Senex is a fast-growing energy company tapping gas from the Atlas and Roma North fields to supply an east coast market where prices have more than doubled over the past six years.
The company is looking to triple its annual output to 60 peta joules of gas from June 2025.
Ms Rinehart’s flagship, Hancock Prospecting, notched a sharply increased record $7.3 billion profit for the year to June 30, underscoring its emergence as one of the country’s most profitable companies.
The performance mainly reflected her $4b share of Roy Hill’s dividends.
