Hancock Energy is close to locking in more than 15 per cent of Warrego Energy shares

The stakes of the two co-founders of Warrego Energy will prove crucial in the takeover battle, as one backs Hancock Energy’s cash bid.

One of the co-founders of Warrego Energy has committed to tipping his shares into shares into Hancock Energy’s bid for the company, but rival Strike Energy, which has its foot on about a third of the company’s stock, appears to be leading the battle at this point.

Co-founders David MacNiven and Dennis Donald - Warrego’s current managing director - each control more than 11 per cent of the stock in Warrego, with Mr MacNiven and a group of minority shareholders committing on Wednesday to back Hancock’s 28c per share bid should it be made unconditional within two trading days.

Hancock is considering this and will make a decision by the end of the week.

Both of the co-founders sold down just more than six million shares each in Warrego in August for 13.5c per share, missing out on a combined $2.16m based on Warrego’s 31.2c share price on Wednesday.

They both still hold significant stakes however, with Hancock telling the ASX that Mr MacNiven had committed his 11.27 per cent stake comprising 137.8 million shares – held by his UK-based Mira LasNubes LLP business – to its 28c a share cash bid.

Hancock is arguing its cash bid is superior to Strike Energy’s one for one share bid, which currently values the company at 32c, for various reasons including the listed company’s possible share price volatility post-acquisition.

READ MORE:The battle for Warrego so far

Other supporters of the Hancock deal revealed on Wednesday include Serena Arif, a 1.05 per cent stakeholder in Warrego with 12.8 million shares, who is connected to Mr MacNiven via his oil and gas entity Delphian Ballistics.

Former Warrego chief financial officer Owain Franks, who holds a 1.06 per cent stake (13 million shares), is also leaning towards the Hancock deal.

“The supportive shareholders, for their own reasons, are seeking to realise cash value for their Warrego shares as soon as possible,” Hancock Energy says in its fourth supplementary bidder’s statement released to the ASX.

Strike managing director Stuart Nicholls said on Wednesday that shareholders who accepted the Hancock offer would be leaving money on the table.

“Strike Energy notes that along with its 19.9 per cent holding in Warrego Energy, we have received commitments from Warrego shareholders who intend to accept Strike’s offer, representing an additional 12.7 per cent of Warrego’s issued capital – a total of 32.7 per cent.

“We believe shareholders have enough information to make a decision about this now.

“Outside Duncan MacNiven’s shares several small Warrego shareholders have agreed to accept the Hancock offer.

“This is perplexing given the ability to easily sell parcels of this size into the market strength at 31c or an 11 per cent premium.

“Strike will continue to monitor trading activity in its shares to ensure that our stock is not being used to engineer an outcome in relation to Warrego Energy.”

Mr Donald’s intentions regarding his 11-plus per cent stake are not clear at this stage, however as a director of the company he is under stricter obligations than Mr MacNiven.

Mr Nicholls said: “We would expect Mr Donald, and all Warrego Directors, to discharge their fiduciary duties by acting in the interests of all shareholders when considering Strike’s takeover offer for Warrego Energy”.

Strike shares were 0.5c higher at 32c on Wednesday.

Originally published as Hancock Energy is close to locking in more than 15 per cent of Warrego Energy shares