Gina Rinehart’s Hancock takes 49 per cent stake in Senex as part of Posco’s $900m takeover deal
Gina Rinehart will emerge with a 49 per cent stake in Queensland’s Senex Energy as part of a takeover by South Korea’s Posco International.
Gina Rinehart’s Hancock Energy will own a 49 per cent stake in Senex Energy after Posco International agreed a binding $900m deal for the Queensland gas producer, boosting the energy ambitions of Australia’s richest person.
The Korean steel maker’s international arm prevailed with its final bid for the local oil and gas player pitched at $4.60 a share plus a 5c per share dividend for the December half, following three previous offers of $4.40, $4.20 and $4 a share.
Hancock first approached Posco about a joint tilt for the gas producer after buyout talks were made public, with the duo already partners in Ms Rinehart’s Roy Hill iron ore mine in Western Australia’s Pilbara.
Once the deal completes, Hancock will pick up a 49.9 per cent stake in Senex with the deal following it recording a massive $7bn profit, one of the biggest results for a private company in recent memory.
Posco owns a string of oil and gas projects through Asia, Peru and Oman and also holds existing investments in Australia including a minority stake in Whitehaven Coal’s Narrabri mine in NSW. The Senex move is seen as part of the Korean company’s global diversification strategy and it is expected to retain Senex’s focus on supplying Australia’s east coast gas market should the deal proceed.
Ms Rinehart’s Hancock has previously backed Victorian gas explorer Lakes Oil, which fought a ban on unconventional gas exploration in the state.
Senex chief executive Ian Davies said Posco was focused on moving to a low carbon economy.
“They have a vision for an Australian acquisition around domestic gas markets, LNG and hydrogen,” Mr Davies said. “And our strategy has been pretty open about the fact that we‘re decarbonising an already low carbon business and a key part of that will be new energy, which includes hydrogen but also electrification of our existing facilities and growth in our existing gas business.”
Citi said it saw merit in the deal despite the lack of synergies on offer.
“Rather than lamenting a lack of premium, we see the prospect of realising net present value for a coal seam gas company as a positive in a sector plagued by reserve downgrades and ESG concerns,” Citi analyst Daniel Levy said.
“The bulk of Posco’s existing exploration and production assets are in Myanmar, and therefore carry significant sovereign risk. Senex’s stable gas generating assets in a country with low sovereign risk should act to significantly reduce the combined risk of Posco’s production portfolio.”
Senex in November announced plans to pay $80m for two gas fields from Australia Pacific LNG, adjacent to its own Atlas project, in a move that will boost Atlas production to 30 petajoules a year in 2024.
Its production focus is on gas from Queensland’s Surat Basin, where it is expecting a rapid growth in output and revenue as supply lifts from its Roma North and Atlas gas projects.
Mr Davies, who is also chairman of the Australian Petroleum Production & Exploration Association, has previously warned the threat of greater regulatory reach into the domestic gas industry could backfire on federal politicians as large users campaigned for intervention to lower prices.
Senex rose 2.9 per cent to $4.58.
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