Tap Oil Ltd., Perth, entered into a binding implementation agreement with Singapore’s Risco Energy Investments (SEA) Ltd. following Risco’s announcement of an increased takeover offer to acquire all the ordinary fully paid Tap Oil shares on issue that Risco does not already own for 9.1¢ (Aus.)/share cash.
Tap Oil’s independent board committee, comprising Damon Neaves and Govert van Ek, have concluded that the new offer is in the best interests of Tap Oil shareholders. They have unanimously recommended that, in the absence of a superior offer, all Tap Oil shareholders accept the offer by selling their shares on-market on the Australian Stock Exchange.
Risco’s initial offer of 7¢/share was made in May and valued the company at $29.8 million (OGJ Online, June 4, 2018).
The takeover bid followed a turbulent 12 months during which time Risco tabled a proposal in November 2017 to change the Tap Oil board. Risco wanted to minimize capital investment and operating costs to increase short-term returns. It wanted Tap Oil to focus on its only production: a 30% interest in Manora oil field in the Gulf of Thailand.
The new offer is slated to close at the end of trading on Aug. 27. Subject to Risco acquiring voting power in Tap Oil of at least 30%, Tap Oil has agreed to appoint a Risco nominee to the board.
Risco has already said that the on-market bid provides Tap Oil shareholders with a simple cash exit from their investment in the company. They will receive the offer consideration in two ASX trading days following their acceptance of the offer.