Its a busy life for Mineral Resources – if it’s not lithium and iron ore one day, it’s oil and gas the next – and that saw perplexed investors punish the company’s shares yesterday, wiping more than 8% off their value after revealed the company revealed half a billion dollar bid for energy group, AWE.
Mineral Resources shares ended the day down 8.3% at $16.37 after it revealed an 80 cents a share offer for AWE.
The all paper offer is 7 cents a share higher than the 73 cents, $463 million cash offer by state-owned China Energy Reserve and Chemicals Group (which is its second offer).
Mineral Resources is seeking AWE board recommendation for its scheme of arrangement which would see AWE shareholders receive one Mineral Resources share for every 22.325 shares they hold in AWE.
The offer, which values AWE at about $507 million, is not conditional on due diligence, according to yesterday’s statement.
AWE’s board said it would review the offer and make a recommendation "in due course". It has yet to respond to CERCG’s second bid after bad mouthing the first non-binding offer.
Shares in AWE closed on Friday at 73¢ after a roller coaster ride over the past two weeks. They ended up 15% at 84 cents.
Mineral Resources said the takeover of AWE is in line with its “clean energy strategy of securing gas assets to vertically integrate the energy supply chain, including the use of LNG plants to provide power solutions to a wider range of end users.”
Investors don’t share that view completely.
Some think there could be another offer from the Kerry Stokes controlled Beach Energy which is AWE’s partner in the highly promising Waitsia gas project in the Perth Basin.
