Australia’s Mineral Resources (MIN.AX) has offered A$484 million ($364 million) for domestic gas producer AWE Ltd (AWE.AX), topping a sweetened bid from state-owned China Energy Reserve and Chemicals Group (CERCG).
The two suitors are targeting AWE’s stake in a gas project in Western Australia, Waitsia, which the company has called the country’s biggest conventional gas find onshore in four decades.
Mineral Resources, a provider of mining infrastructure, made an all-scrip offer worth A$0.80 a share based on its closing price last Friday, a 47 percent premium to AWE’s last trade before it revealed on Nov. 30 that it had received an offer from CERCG.
CERCG last Friday raised its all-cash offer slightly to A$0.73 a share, going straight to shareholders after AWE rebuffed a friendly approach.
Both offers are well below a valuation of A$0.91 from analysts at Royal Bank of Canada, which ran a recent share sale for AWE.
Shares in Mineral Resources, which has offered one of its shares for every 22.33 AWE shares, fell 4.8 percent after the bid was announced.
Mineral Resources said the acquisition would help it secure energy supplies for its own operations.
CERCG said on Monday it is mainly looking to supply gas to remote communities and mine sites in Australia using its technology to liquefy gas, transport it in containers and regasify it in areas not connected to pipelines.
However it is also considering shipping LNG in containers to Australia’s east coast, where gas prices have soared due to the start-up of three gas export plants and rising demand for gas-fired power.
AWE rejected a A$750 million scrip-based offer from Senex Energy in 2013 before oil prices collapsed and a A$421 million approach from U.S. private equity firm Lone Star last year.
Source: Reuters
