Senex Energy Ltd., Brisbane, is in discussions with South Korean conglomerate POSCO International Corp. regarding a revised POSCO takeover offer.
POSCO first made an approach to Senex in July with a non-binding and indicative proposal to acquire 100% of Senex for $4 (Aus.) per Senex share. A second offer came in August at $4.20/share and a third was made Sept. 2 for $4.40/share.
Upon receipt of the third offer, Senex granted POSCO an exclusivity period to complete due diligence enquiries. Following further discussions, Senex has extended POSCO’s exclusivity period to Nov. 5 to provide time for POSCO to assess a further revised proposal at a price higher than $4.40/share.
Currently, the $4.40 offer represents a 40% premium to the 30-day volume-weighted average price (VWAP) on Sept. 2 (the date prior to receipt of the revised offer). It also represents a 19% premium to the 30-day VWAP on Oct. 15, which is the last trading day prior to the extension of time announcement.
POSCO said that if a transaction proceeds it is likely to be implemented via an off-market takeover offer which would be subject to a 50.1% minimum acceptance condition as well as Australian Foreign Investment Review Board approval.
Senex believes the best interests of its shareholders will be served by continuing to engage with POSCO and assessing any forthcoming proposal on its merits. The board added that there is no certainty that ongoing discussions will result in any binding agreement.
Senex holds significant coal seam gas acreage in the Surat and Bowen basins of southeast Queensland, including the Roma North and Project Atlas developments. It has an annual production of 3 MMboe with proven and probable gas reserves of about 770 petajoules.
POSCO specializes in oil and gas exploration and production, LNG, agri-resources, and steel production with subsidiaries in 45 countries, including an office in Sydney. It has a market capitalization of more than US$2 billion.