Japan’s Mitsui is understood to have lobbed a low-ball offer for Mineral Resources’ onshore Perth Basin assets, prompting the company backed by billionaire Chris Ellison to run an auction for the assets.
It comes after DataRoom reported on August 26 that the pair were tipped to be in talks about the MinRes-owned assets in the Perth Basin that include the Lockyer conventional gas project development and Norwest Energy’s that it bought. Working on the potential sale of the assets is investment bank JPMorgan.
The sale is expected to draw other names, including Hancock Energy, the company of billionaire Gina Rinehart, and also Strike Energy, which operate there.
Mitsui owns the Waitsia gas plant with Beach Energy, and, as earlier reported, there would be efficiencies to be gained by acquiring more gas to process through that infrastructure.
A deal could be worth several hundred million dollars.
Private equity groups like Carlyle Group are also sniffing around.
MinRes has been looking at ways to strengthen its balance sheet to fund projects, including its Onslow iron ore project.
In June, it sold a 49 per cent stake in the haul road for its Onslow Iron Project for $1.3bn to Morgan Stanley Infrastructure Partners in a deal seen as evidence MinRes had a pressing need for funding. The $7.4bn MinRes had net debt of $4.4bn at June 30 and is at the limit of its borrowing capacity.
MinRes released a statement to the market on Monday in response to inbound queries from a number of domestic and global parties, and said it was reviewing development and partnering opportunities relating to Perth Basin assets. It would assess joint-venture partnerships as well as full or partial-sale options. It said it was also considering development financing options through infrastructure funding partners.
Mineral Resources generates income from its three iron ore hubs – Onslow Iron in the west Pilbara, Utah Point in Port Hedland and Yilgarn in Esperance.
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