Australian oil and gas firm AWE has accepted a takeover offer of A$526m ($403m) from mining infrastructure provider Mineral Resources (MRL) by entering into a binding scheme implementation deed with the latter.
MRL has sweetened its offer to AWE from an earlier proposed acquisition price of A$484m ($364m). Prior to that, AWE had received an A$463m ($347.94m) offer from China Energy Reserve and Chemicals Group (CERCG) which was later withdrawn.
As per the merger proposal, MRL will offer shareholders of AWE A$0.831 ($0.64) per every share they hold in the oil and gas company.
The AWE shareholders can receive the consideration either in the form of cash and share or opt for maximum cash consideration or maximum share consideration.
AWE chairman Kenneth Williams said: “The acquisition price represents a highly attractive opportunity for AWE shareholders to realise a material premium for their AWE shares.
“Shareholders who receive Mineral Resources shares can choose to remain invested in the larger and more liquid Mineral Resources or they can choose to sell their new Mineral Resources shares for cash”.
MRL had earlier stated that that the acquisition of AWE is in line with its renewable energy strategy of adding gas assets to vertically integrate its energy supply chain. This would include the use of LNG-fueled power plants to provide power solutions to a wider range of end users.
MRL managing director Chris Ellison said: “The acquisition of AWE, including its 50% interest in the Waitsia Gas Project, is logical and on-strategy for MRL. MRL has a strong desire to develop this tier one gas asset to form a key pillar of the MRL business over the next 20 to 30 years.
‘We expect to also be able to provide gas to a wider range of end power users, displacing diesel and providing a range of benefits to the Western Australia economy.”
The transaction would need the approval of AWE shareholders along with a Court approval and other conditions.