(Reuters) - China Energy Reserve and Chemicals Group (CERCG) has gained clearance from Australia’s foreign investment regulator for its bid for AWE Ltd (AWE.AX), although it is unlikely to win after being trumped by a $403 million offer from Mineral Resources (MIN.AX).
The nod will mean that state-owned CERCG can follow through with sending out a bidder’s statement to AWE shareholders, which is a regulatory requirement.
State-owned CERCG chances are, however, slim after Mineral Resources sweetened its offer 14 percent above CERCG’s bid and added a cash component to what had been an all-share deal - a proposal that has been unanimously backed by AWE’s board.
“We have entered into a binding agreement with Mineral Resources and remain focused upon and committed to its successful conclusion,” an AWE spokesman said in an emailed statement.
Under the new offer, Mineral Resources has promised to pay the equivalent of A$0.83 a share, as long as Mineral Resources shares average between A$15 and A$21 a share ahead of a vote on the bid, expected in April.
AWE had declined to give CERCG access to its books with its A$0.73 a share offer, and CERCG was unwilling to raise its bid without having access to AWE’s books.
“The response from our shareholder base to the Mineral Resources transaction has been overwhelmingly positive. We have a policy of not commenting on the specific intentions of any particular shareholder,” AWE’s spokesman said.
AWE shares inched up 0.6 percent on Friday to A$0.86, roughly in line with the broader market .
Reporting by Rushil Dutta in Bengaluru and Sonali Paul in Melbourne; Editing by Eric Meijer and Edwina Gibbs