Hancock Energy in box seat as Beach pulls out of Warrego Energy takeover tussle

Gina Rinehart’s Hancock Energy has moved into pole position in the takeover battle for Warrego after Beach Energy declined to match its bid.

Hancock Energy owner Gina Rinehart.

Warrego Energy has endorsed the 28c per share takeover offer for the company lobbed last week by Gina Rinehart’s Hancock Energy, after early contender Beach pulled out of the running.

Kerry Stokes-backed Beach Energy pitched its first bid at 20c per share on November 11 - a day after Strike Energy’s scrip offer - negotiated up from 17c a share by the Warrego board.

Hancock Energy topped that with a 23c bid, which Beach soon countered with a 25c a share offer, with Hancock then returning serve with a 28c per share bid.

Beach had until Monday to match or better that offer under a clause in its scheme implementation deed with Warrego, but on Friday said it was pulling out, citing a “disciplined approach to inorganic growth’’.

READ MORE:Strike Energy builds strategic stake in Warrego

Beach chief executive Morne Engelbrecht said the company would now refocus its attention on its own exploration programs in the Perth Basin.

Warrego on Friday said it had now changed its recommendation from the Beach to the Hancock offer, and shareholders could expect a bidder’s statement from the Rinehart-owned company on about December 14.

“As previously disclosed, the revised Hancock takeover offer is subject only to a ‘pre-emptive rights condition’, which requires the Warrego board to recommend in its target’s statement or any supplementary target’s statement that Warrego shareholders accept the Hancock takeover offer in the absence of a superior proposal, and a ‘no prescribed occurrences condition’,’’ Warrego said.

“The Hancock takeover offer is not subject to any minimum acceptance condition.’’

The Hancock offer has few conditions, and with no minimum acceptance condition, the company will buy any shares it is offered, regardless of whether it can achieve a full takeover.

Shareholders who sell into the offer will also be paid within 10 days, and Warrego warned this could deny them the ability to sell into any new competing offer which might emerge.

“In those circumstances, Warrego shareholders intending to accept the Hancock takeover offer may wish to delay their acceptance into that offer for the time being, to see if a competing offer emerges,’’ the company said.

The Hancock offer is scheduled to remain open until January 31.

Also this week it emerged that Strike, which is a joint venutre partner with Warrego in the West Erregulla gas project in the Perth Basin, had increased its stake in the company from 8.2 per cent to 19.9 per cent.

This would have proved a blocking stake for a full takeover, but given Hancock’s willingness to buy shares without a minimum acceptance, it does not block any potential share sales to that company.

Strike told its shareholders that they should not make any assumptions about its intentions regarding the increased stake.

“For the avoidance of doubt, Strike’s board has not formed any intention with regards to any future transaction that may involve Warrego, and Strike is currently considering all available strategic options,’’ the company said in a statement on Wednesday.

Strike’s scrip bid is currently priced at 0.775 shares, valuing it at 26.4c based on its share price on Friday of 34c, down 10.7 per cent.
Warrego shares were 3.3 per cent lower at 30c.

Originally published as Hancock Energy in box seat as Beach pulls out of Warrego Energy takeover tussle