Coming to the close of the 2022 calendar year, Warrego Energy [ASX:WGO] was the subject of some impassioned interest from prospective energy company competitors.
Warrego, caught at the centre of a bidding triangle had first knocked down Strike Energy’s [ASX:STX] initial all-scrip offer, despite their existing partnership, and the competition then garnered heat.
Today, STX announced the opening of an off-market takeover bid for all outstanding Warrego shares, trading with new Strike shares.
Strike has begun 2023 with a strong footing, having raised in share value by more than 22% over the last 11 days — across the full year, it rose 92.5%.
Warrego too experienced a 24% boost for the first days of the year and climbed a whopping 196% across 2022:
Strike opens off market takeover bid for Warrego
In December last year, Warrego was caught at the centre of a bidding war that started when partner Strike Energy put in for an initial all-scrip offer.
With several counter bids passing Warrego’s table between Beach, Strike, and Hancock, it was the latter that secured a significant chunk (25.92%) of the company.
Yet Strike isn’t far off, busting out the unexpected move called the Share Purchase Agreement, swapping ordinary shares at a 1:1 exchange ratio.
Today, STX announced the opening of said off-market takeover bid for all outstanding Warrego shares, trading with new Strike shares at the ratio stated above.
Strike is offering 38.5 cents for each Warrego share, which is based on its (being Strike’s) last closing price with a 37.5% premium to Hancock’s current offer of 28 cents for each Warrego share.
This is also a 6.94% premium to Hancock’s proposed conditional offer of 36 cents a Warrego share, and a 61.8% premium to Warrego’s ‘undisturbed price’ — as based on WGO’s 30-day VWAP.
Managing Director and CEO of Strike Stuart Nicholls stated:
‘Strike continues to believe that Strike’s all script offer represents the best value for all Warrego shareholders, and that operational consolidation of Strike and Warrego will deliver significant value accretion to both Strike and Warrego shareholders. This offer allows Warrego to participate in future potential upside and retain exposure to the exciting and merging Perth Basin. Should Strike achieve operational control of Warrego, Strike expects that it can accelerate, maximise and optimise the gas production cash flows and capital, while reducing the carbon footprint of the Erregulla domestic gas project.’
Nicholls said that Warrego shareholders would have the opportunity to participate in the offer, calling it ‘clear value creation’ that will enhance equity market presence, boost liquidity and stronger share register.
The opportunity for Warrego shareholders to accept Strike’s offer commences today.
Warrego is not short of industry-sharing admirers, for Minerals Resources [ASX:MIN] has also acquired a 16.35% stake in Warrego, even in the midst of its own takeover offer proposal for its venture partner Norwest Energy [ASX:NEW].
An incoming boom for commodities
Commodity-dealing resources and energy companies have begun 2023 with a bang.
To add to that end, our resources expert and trained geologist, James Cooper, thinks the Australian resources sector is set to enter a new commodities boom brought on by the ‘Age of Scarcity’.
Similar patterns that occurred 20 years ago are happening again.
James is convinced ‘the gears are in motion for another multiyear boom in commodities’.
A boom where Australia (and ASX stocks) stands to benefit…
The next big mining boom is predicted to happen in the next few years.
You can access a recent report by James on exactly that topic, AND access an exclusive video on his personalised ‘attack plan’, right here.
If that isn’t enough to sate your curiosity, we can also share with you a recent interview with James and Greg at Ausbiz at the end of last year.
For The Daily Reckoning Australia