Ball in Beach Energy’s court as Warrego accepts Hancock Energy takeover offer
Hancock Energy is the new leader in the battle for control of Warrego Energy, but it will stay interesting with Beach having five days to return fire, and Strike’s bid briefly ahead on value.
Gina Rinehart’s Hancock Energy has won top billing in the takeover battle for Warrego Energy, triggering a five day countdown for Beach Energy to make a competing bid.
Meanwhile the value of Strike Energy’s scrip bid - the first to be launched back on November 10 - briefly surpassed the value of the Hancock bid on Thursday as its shares continued to show strength.
And Warrego’s own share price continues to surge, up another half a cent to 26c, putting all contenders currently out of the running, at least on paper.
The Warrego board on Thursday said it had assessed Hancock Energy’s 23c per share bid which was lobbed on Wednesday, and had determined it was superior to the 20c per share Beach bid launched on November 11 - a day after the Strike offer was announced to the market.
The Warrego board has previously endorsed the Beach bid, and the latter now has five days “under the matching rights regime in the Beach scheme implementation deed’’ to make a matching offer.
“Until Beach has had an opportunity to match the Hancock takeover offer, the Warrego directors maintain their existing recommendation in favour of the Beach scheme proposal,’’ Warrego told the ASX in a statement.
Meanwhile Strike’s shares briefly touche 29.7c in trade on Thursday, valuing its bid at 23.02c per Warrego share.
The stock was trading at 29.5c, up 0.5c by mid afternoon, valuing the scrip bid at 22.86c, putting the Beach offer firmly in third place.
Beach Energy on Thursday declined to comment on whether it would be upping its bid.
Warrego shares have traded in the 10c-16c range for much of the past 12 months, but it has emerged during the takeover tussle that it has been having conversations about a change of control transaction with a number of interested parties on a confidential basis.
This resulted in both Strike and Beach upping their bids before they were announced, and Hancock said on Wednesday it had been talking to Warrego, however those talks had now ceased.
Hancock’s off-market bid comes with limited conditions, including no lower limit on the amount of shares it would acquire, meaning it would buy stock regardless of whether it was certain of a knockout takeover.
It also promised to pay shareholders who accepted its bid within 10 days and it has waived a number of conditions usually associated with takeover offers.
Both the Strike and Beach offers have promised Warrego shareholders the potential for further returns once they take control and can sell the company’s Spanish assets, however Hancock says its bid factors this value in.
Strike is both a joint venture partner with Warrego in the West Erregulla gas project, and owns 8.2 per cent of the company.
The battle for control of for Warrego has kicked off speculation that a bidding war for companies with Perth Basin assets has begun, with Credit Suisse analyst Saul Kavonic telling clients in a research note when things kicked off that “we see more to come’’ on the takeover front, “with all Perth Basin players potentially to be put in play’’.
Meanwhile Beach managing director Morne Engelbrecht told his company’s recent annual meeting that a tilt for Strike itself was not being considered.
“We have no intention to make an offer for Strike Energy,’’ Mr Engelbrecht said this month “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.’’