Beach Energy says it has no plans to bid for Strike Energy

Beach Energy has hit back at talks it could lob a takeover bid for Strike Energy - the joint venture partner of Warrego, which it has pitched a $246m offer for.

Beach Energy has sought to hose down speculation it could launch a second takeover bid, this time for Warrego Energy’s joint venture partner Strike Energy.

Beach and Strike have competing takeover bids on the table for Warrego, with Beach’s 20c per share bid currently winning the backing of the Warrego board.

But with Strike owning 8.2 per cent of Warrego and the two companies 50:50 joint venture partners in the West Erregulla gas project in Western Australia, analysts have speculated a wave of takeover action could soon kick off among Perth Basin-focused companies, including a possible Beach bid for Strike.

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Speaking at the company’s annual general meeting on Wednesday, chief executive Morne Engelbrecht said he wanted to “set the record straight on some speculation currently in the market’’.

“We have no intention to make an offer for Strike Energy,’’ Mr Engelbrecht said.

“If you apply our Warrego offer on a look through basis to Strike’s 2P (gas) reserves you’ll realise we believe Strike is not something we would acquire at its current share price.’’

Beach Energy CEO Morne Engelbrecht. Picture: Supplied.

Mr Engelbrecht also characterised Strike’s scrip bid as “inferior”.

“Strike’s offer is all-shares which creates inherent volatility in the offer value from movements in Strike’s share price,’’ he said.

“We note Strike’s share price has been as low as 14.5c over the last 12 months.’’

Mr Engelbrecht said Beach would “bring financial strength to the West Erregulla joint

venture, to achieve faster delivery of the project relative to its current pathway’’.

Strike on Tuesday said it was “disappointed’ that the Warrego board had endorsed the Beach bid, after previously engaging with Strike on its scrip bid during confidential talks dating back to mid-September.

It also hinted at a go-slow on the West Erregulla project should Beach’s bid win out.

While Beach’s bid, announced late on Friday, initially trumped the Strike bid, which was pitched at 0.775 Strike shares for each Warrego share, the appreciation in Strike stock following the Beach announcement pushed the former’s offer higher in terms of value.

Strike stock was trading at 27.5c mid-Wednesday, valuing its bid at 21.3c.

Warrego shares were trading steady at 21.5c, while Beach stock was 1.5c higher at $1.75.

Shares in fellow Perth Basin-focused company Talon Energy were 2.8 per cent higher at 18.5c while Norwest Energy stock was 2 per cent lower at 4.8c.

Originally published as Beach Energy says it has no plans to bid for Strike Energy