Beach Energy Ltd. has decided not to match Hancock Prospecting Pty. Ltd.’s last offer for the acquisition of Warrego Energy Ltd. of A$0.28 ($0.19)/share. Beach already has 19 gas exploration prospects and leads, including 11 identified by 3D seismic and 8 identified on 2D data. The company has a 12–18 month exploration program underway and says there is potential to extend or accelerate the drilling of additional prospects.
Beach made two offers for Warrego (Nov. 14, 2022, at A$0.20/share and Dec. 2 at A$0.25/share), both of which involved a scheme of arrangement. But Hancock quickly countered with two offers, the last a cash bid of A$0.28/share within hours of Beach’s final offer Dec. 2. The Warrego board subsequently determined that the off-market takeover bid from Hancock was a superior proposal.
Following Beach’s withdrawal from the contest Dec. 9, 2022, the Warrego board has withdrawn its previous recommendation in favor of the Beach scheme and unanimously recommends Warrego shareholders accept the Hancock takeover offer, but again with the caveat “in the absence of a superior proposal.”
Warrego also noted the Dec. 7, 2022, Strike Energy announcement that Strike had increased its ownership of Warrego to 19.9% and that Strike’s Board had not formed any intention with regards to any future transaction that may involve Warrego and that is “considering all available strategic options.” Warrego said that the increase in Strike’s percentage ownership of Warrego does not impact the availability of the Hancock offer.
The Hancock offer will remain open until Jan. 31, 2023, unless extended or withdrawn, but once a Warrego shareholder accepts the offer, they will not be able to sell their shares under a competing takeover offer if one is made. Nor will they be able to sell their shares on-market if the market price is above the Hancock offer price.