AWE Ltd. has given suitor Mineral Resources Ltd. three days to match an AU$594 million (US$480 million) takeover offer from Mitsui & Co. Ltd., or it will back the Japanese bid as a superior offer.
The Australian gas producer said in a statement it notified Mineral Resources on Jan. 30, giving it a deadline of Friday, Feb. 2 to match the Mitsui proposal, which was 14.5% above an offer from Mineral Resources.
AWE said it would agree to Mitsui’s all cash offer of AU$0.95 (US$0.77) a share if Mineral Resources did not match it.
Investors, however, are eyeing a higher bid emerging, with AWE’s shares currently trading at AU$0.97 (US$0.79) a share.
Mineral Resources was not immediately available for comment on Jan. 31, but a spokesman said in an emailed statement on Jan. 29 that the company was looking at Mitsui’s proposal and considering its position.
Mitsui’s offer on Jan. 29 marked the first full takeover bid by the Japanese trading giant for an Australian company and would make it the operator of a gas field for the first time, bolstering its credentials to bid on other gas assets.
State-owned China Energy Reserve and Chemicals Group had also bid for AWE last November, although its offer was later topped by Mineral Resources.
All three suitors want AWE for its 50% stake in the Waitsia gas field, considered the biggest onshore conventional gas find in Australia in the last 40 years, with enough gas to supply about a 10th of the Western Australian market.
The other owner of Waitsia, Beach Energy Ltd., said it is closely watching the AWE takeover tussle. It just obtained its 50% stake with its acquisition of Origin Energy’s Lattice business, completed on Jan. 31.
“The key for us is that we have long thought that Waitsia was a very high quality asset,” Matt Kay, Beach CEO, told Reuters.
Kay declined to comment on whether Beach would be comfortable with Mineral Resources, a miner, becoming operator of Waitsia, but said Beach would be happy to volunteer its skills running gas projects to any partner.
He did not rule out selling Beach’s Waitsia stake to one of AWE’s under-bidders, but declined to comment on whether Beach had held any talks with any of the suitors.
“We’re not actively selling any assets. But if someone wants to put a number on the table, we’re willing to listen and hear.”
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