Last week Warrego Energy [ASX:WGO] announced it was obliged to wait for a counter-bid from takeover prospector Beach Energy [ASX:BTC] after receiving a superior offer from Hancock Energy at 23 cents.
This resulted in a series of competitive back and forth offers between the two energy firms.
Today, the battle for Warrego’s takeover has turned a new and unexpected corner with the company’s partner Strike Energy [ASX:STX] increasing its stake in WGO to 19.9%.
Strike had put in an offer to takeover Warrego but was knocked out of the competition early, leaving the takeover battle raging between Beach and Hancock.
With its increased shareholding in Warrego, Strike is now the largest shareholder, and speculation surrounding the partner company’s intentions is surmounting.
Warrego’s share price was down 1.5% in the early Wednesday afternoon, while Strike went up more than 7%. They are up 182% and 78%, respectively, year-to-date.
Source: TradingView
Warrego, Strike, Beach, and Hancock: The ultimate battle for control
When Hancock put its 23 cents a share takeover offer to Warrego — trumping Beach Energy’s original 20 cents offering — a battle for control quickly ensued.
And yet Strike was the first to put an unsuccessful all-scrip offer in for its energy partner, which first opened the doors for Beach to take a shot.
Hancock’s next offer was deemed superior to Beach’s, but Beach’s offer included terms that meant Warrego had to wait for a its counteroffer in the event of any new deals put to WGO.
Beach responded by upping its ante with a takeover offer of 25 cents, but it’s now Hancock Energy taking the leading bid with an all-cash offer of 28 cents a share, valuing Warrego at $342 million.
Today’s revelation has come in the form of a side-move by Strike Energy, in which the partner company announced it has secured a 19.9% shareholding — and voting power — in Warrego.
This casts some uncertainty over which direction the ongoing battle for WGO ownership may take.
Strike has entered into a Share Purchase Agreement with Warrego shareholders via a swap of Strike ordinary shares at a 1:1 exchange ratio.
On the completion of the settlement, Strike will become Warrego’s largest shareholder, increasing its ownership of EP469, the West Erregulla gas field, to approximately 60%.
Strike’s CEO Stuart Nicholls commented:
‘Strike has a strong track record of identifying and securing valuable and strategic energy assets at various stages of maturity. The expansion of our ownership of Warrego shares and the resulting look through to an increased economic interest in the West Erregulla gas field is a further demonstration of this.’
Settlement of the share swaps will be by way of off-market transfers and is expected to occur within the next week.
Strike’s Board said that it has no further intention to engage any future transactions that may involve Warrego, and the company is currently considering all available strategic options.
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