Macquarie Group enters new play for Central Petroleum
Macquarie Group, Sydney, is ready to increase its bid for 100% of Brisbane-based independent Central Petroleum Ltd.
Central has requested a trading halt on the ASX until Mar. 13 saying there is a pending announcement of a revised offer from Macquarie. Official notification of the new bid is expected in the next few days.
Analysts expect Macquarie to make a slight increase to its 17.5¢/share (Aus.) cash offer, worth $75.8 million (Aus.), made last November. The offer was rejected by Central. The Central board did, however, grant Macquarie due diligence access to encourage a higher bid.
Macquarie already has a 2.3% stake in Central and serves as that company’s main financier, having loaned it $90 million.
In December, Macquarie added to its interests in central Australia by acquiring Santos’ half-share in the Mereenie oil and gas field (OGJ Online, Dec. 21, 2016). Central holds the remainder of the field.
Mereenie field is potentially a key supplier to the eastern Australian gas market when an $800-million gas pipeline being built by Jemena to connect the Northern Territory to the east coast grid is completed in mid-2018.
The cash-strapped Central is in need of funds in the interim to take advantage of the market potential that will be opened up.
The company suffered a setback last month when France’s Total SA withdrew from an exploration venture with Central in the southern Georgina basin. There is a growing perception, however, that the predicted severe east coast gas supply shortage will increase the value of any undeveloped gas that can be brought to the market place in the short-to-medium term.