Those who have been following the Beach-Strike-Hancock battle to takeover Warrego Energy [ASX:WGO] will be interested to know that it has been Gina Rhinehart’s company who has made the concluding play.
In upping its share offer from 28 to 36 cents, Hancock has overshadowed WA gas producer’s joint venture partner, Strike Energy, and dashed its own hopes of pulling a winner with an all-scrip offer.
Minerals Resources buying into Hancock’s 36-cent-share offer enabled an increase in Hancock’s stake in WGO and thereby knocked the other competitors out of the water.
Warrego’s shares have seen a boost of 192% over the last full year, and the Perth basin-based gas miner is up on its sector average by 167%.
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Hancock takes hold of Warrego with a 50.54% stake increase
Hancock has officially taken a winning step and seized control of WA oil and gas resource company Warrego — ending a battle that has been dragging on for months between energy companies Strike Energy and Beach Energy, for example.
Thanks to Minerals Resources deciding to sell its shares at 36 cents a share, Hancock has climbed up the ranks of Warrego’s shareholders and stepped over the significant threshold with a 50.54% stake, becoming the biggest substantial shareholder of the gas company — and therefore taking charge.
Hancock now has the controlling shareholding of Warrego with more than 50% ownership and has blown Strike’s scrip offer out of the water, declaring it ‘an inferior outcome to Warrego shareholders in all cases.’
The takeover battle was highly competitive due to the nature of assets that Warrego ownership signified — a highly prospective gas resource in the Perth basin that comes with an already-prepared gas processing system and an established infrastructure pipeline.
The existing gas operations established by Warrego will prove highly useful for Hancock’s mining project in the Pilbara region of Western Australia.
Hancock’s latest offer came was its 10th bidders’ statement and was shared by Warrego earlier this morning.
The outline stated that Hancock had now surpassed the 40% increase condition based on the original 28 cents a share offer when it upped the proposal to 36 cents.
It’s a big jump since Beach’s initial offer of 20 cents per WGO share and again on the 23 cents offered by Hancock in the earlier days of the takeover struggle.
To cross off all formalities, it is now down to Warrego shareholders to decide whether to accept Hancock’s offer or Strike’s scrip offer, consisting of one Strike share for one Warrego share.
Warrego’s board has advised shareholders not to do ‘nothing’ at this time, with Warrego board members explaining that remaining minority shareholders might face a significant reduction in trading liquidity and could come into some issues seeking equivalent cash value for their shares.
The majority of Warrego’s board recommends the Hancock offer, and of course, Hancock now holds power as the controlling body of the Warrego.
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Regards,
Mahlia Stewart,
For The Daily Reckoning
