China Energy Reserve and Chemicals Group (CERCG) and Mineral Resources have announced their wishes to take over Perth-based oil and gas explorer AWE for 73 cents per share and 80 cents per share, respectively.
Since Mineral Resources’ bid is higher, AWE has advised its shareholders via the ASX not to take action until “further developments” proceed.
CERCG, an integrated energy company and significant investor in oil and gas exploration and petrochemical projects, wants to purchase all shares in AWE (through subsidiary CERCG Australia) as an attempt to expand its international portfolio.
“We are pleased to make this offer directly to AWE shareholders which provides them with the opportunity to lock in certain all cash value at an attractive price while removing the significant operational and market risks associated with AWE,” said CERCG Australia managing director Liping Xuan.
“We are also pleased that AWE shareholders, who are the ultimate decision makers, will have an opportunity to realise compelling value for their shares.”
Purchase of AWE’s total shares at 73 cents per share places the company’s fully diluted value at $463 million, while MinRes’s offer is worth $484 million; CERCG had already increased its proposal from 71 cents per share; the initial offer was considered insufficient by AWE to provide CERCG with access to due diligence.
MinRes’s offer would allocate one MinRes share to AWE shareholders in return for every 22.325 AWE ordinary shares. MinRes’s offer represents the third bid for AWE in two months.
AWE’s 50 per cent-owned Waitsia gas project (the other 50 per cent is owned by Origin) in the Perth Basin is proving a particularly attractive project for investors, and has been estimated to hold resources capable of providing 10 per cent of Australia’s gas needs for the next decade.