Article by Sean Smith courtesy of the West Australian.
Warrego Energy is now the centre of a three-way takeover tussle, with Gina Rinehart launching a $280 million counter offer after failed talks with the target’s board.
The 23¢-a-share offer by Mrs Rinehart’s cashed-up flagship Hancock Prospecting gazumps an agreed 20¢ offer by Beach Energy after the Warrego board passed over a proposal by Strike Energy.
However, it still has to win the backing of Warrego directors.
The Hancock offer lobbed as Warrego was hosting an investor webinar on Wednesday to explain its rationale behind accepting the Beach bid.
Hancock’s takeover papers lodged with the Australian Securities Exchange revealed the group had been in confidential takeover talks with Warrego but those talks had “now ceased”.
The company did not disclose the logic behind the offer but Hancock is a 49.9 per cent shareholder in east coast gas producer Senex Energy and mining companies, including Chris Ellison’s Mineral Resources, have been eyeing gas with a view to reducing their reliance on diesel.
Hancock is also the biggest shareholder behind MinRes in another Perth Basin play, Norwest Energy, with 3 per cent.
Mr Ellison said two weeks ago MinRes was watching the battle for Warrego with the interest.
Warrego and Strike are equal partners in the proposed West Erregulla gas development in the Perth Basin, with the companies already sitting on gas supply contracts with the likes of Wesfarmers and Alcoa.
“Hancock had previously been in discussions with the Warrego board on a confidential basis to discuss a potential acquisition of Warrego,” Hancock said.
“Further to those discussions (which have now ceased), we have put this compelling offer together following our review of both publicly available information concerning Warrego as well as limited non-public information made available by Warrego to the Hancock Group under the confidentiality agreement prior to the announcement of the Beach offer.”
Seven Group Holdings, the major shareholder in Seven West Media, the publisher of thewest.com.au, has a 30 per cent stake in Beach Energy.
Hancock said its offer was free of minimum acceptance conditions and therefore offered a cash return to Warrego shareholders not matter whether it gained control.
That would also neutralise Strike’s 8 per cent shareholding which, under a scheme offer could potential block a bidder from moving to compulsory acquisition.
Hancock noted that its offer was pitched at a 67 per cent premium to Warrego’s six-month volume-weighted average share price before the proposals for the company were made public.
