SYDNEY Dec 16 Australian oil and gas explorer
AWE Ltd said it has rejected a A$750 million ($672
million) conditional scrip-based offer from Senex Energy Ltd
, arguing the approach undervalued the company and
disadvantaged its shareholders.
While Senex shares dropped 6.5 percent following the
rejection, AWE stock shot up 7 percent, suggesting the company
remains in the takeover spotlight.
AWE, which recently said it aims to double production and
triple cash flow by 2017, said it saw more value in
commercialising current opportunities than a merger or
The company has shale gas assets in the Perth Basin in
Western Australia and an Indonesian project that has around 100
million barrels of recoverable oil.
Senex's operations are focused on oil and gas in the Cooper
Basin in central Australia and coal-bed methane on the east
Senex had proposed issuing 1.9 Senex shares for every AWE
share, resulting in Senex holding 53 percent of the merged group
and AWE 47 percent.
Based on the closing price of Senex's shares on Dec. 12, the
day before the offer was made, the takeover offer implied a
price for AWE shares of A$1.44.
The stock was below that level on Monday, gaining 7.2
percent by 0010 GMT to A$1.27. Senex shares, meanwhile, fell 6.5
percent to A$0.72.
AWE said the offer significantly undervalued its shares
without an appropriate premium for control. It added that the
resultant market valuations of the companies were unfair,
considering AWE would contribute a substantially greater share
of reserves, production and revenue.
Senex, which formally withdrew its offer following the
rejection, said the proposal was consistent with its
"disciplined approach to growth."
The offer was conditional on the conclusion of due diligence
and subject to a 90 percent minimum acceptance condition.
($1 = 1.1166 Australian dollars)
(Reporting By Jane Wardell; Editing by Ed Davies)