- Strike Energy (STX) ups the ante once more in its battle for full control of joint venture partner Warrego Energy (WGO), now offering a one-for-one all-scrip deal
- The new bid implies an offer of 33.5 cents per WGO share — a 19.6 per cent premium to the latest 28-cent-per-share offer from Gina Rinehart’s Hancock Prospecting
- Further, Strike claims its own offer comes with fewer conditions and provides WGO shareholders with more upside through its Perth Basin assets
- Today’s announcement from Strike comes alongside word of a $153 million financing package for development and pre-development work across its Perth Basin assets
- Warrego shares are up 10 per cent and trading at 33 cents at midday AEDT, and Strike shares are down 0.75 per cent to 33 cents at the same time
Strike Energy (STX) has upped the ante once more in its battle for full control of joint venture partner Warrego Energy (WGO), now offering a one-for-one all-scrip deal.
The new bid implies an offer of 33.5 cents per WGO share — a 19.6 per cent premium to the latest 28-cent-per-share offer from Gina Rinehart’s Hancock Prospecting.
Further to the higher bid, Strike said its offer gives Warrego shareholders the chance to participate in ongoing potential upside through the benefits of exploration success in its WA-based Walyering gas project, which is slated to enter first production in 2023.
Hancock’s offer, Strike argued, proposed a final and terminal value with no such upside.
Additionally, Strike said its offer comes with fewer conditions than Hancock’s, including no minimum acceptance conditions or material adverse change conditions.
The new offer comes less than two weeks after Strike bolstered its shareholding in Warrego to 19.9 per cent.
Strike Managing Director and CEO Stuart Nicholls said the new offer provided a pathway for WGO shareholders to “maximise value” out of their investment.
“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 product,” Mr Nicholls said.
“We intend to put this offer directly to the shareholders of Warrego to give them the opportunity to participate in the clear value creation we can see from this transaction.”
Warrego acknowledged the new Strike bid but urged shareholders to take no action as it weighed its options.
Today’s announcement from Strike comes the same day the company announced a $153 million financing package for development and pre-development work across its Perth Basin assets — including its Walyering and Erregulla projects.
The scuffle for control of Warrego has been ongoing since mid-September, with Strike, Hancock, and Beach Energy (BPT) each having lobbed several bids to the WGO board.
Strike’s latest bid is nearly double its initial offer, which valued WGO at 18.6 cents per share.
Warrego shares traded at 12 cents at the beginning of 2022. Today, they were trading at 33 cents at midday AEDT — a 175 per cent year-to-date increase.
Strike shares were trading at 33 cents at the same time.