Chinese company withdraws AWE takeover offer

A China state-run company is backing away from its proposed acquisition of the Australian oil company AWE Limited.

China Energy Reserve and Chemical Group Australia Pty Limited (CERCG) last week launched its offer to take over AWE, with AWE immediately deeming the offer not attractive enough.

CERCG’s offer was for the acquisition of 100% of the shares in AWE, on a fully diluted basis, at a price of $0.71 cash per share under either a recommended takeover bid or a scheme of arrangement (indicative proposal).

At such a price, the total cash consideration for the acquisition was at around $430 million. The $0.71 per share offer by CERCG was higher than the $0.55 and $0.545 closing prices of shares the company reported on Wednesday and Thursday last week.

Offer off table

In an update on Tuesday, December 5, AWE said takeover offer had been officially withdrawn by CERCG.

“AWE board remains fully committed to acting in the best interests of, and maximising value for, AWE’s shareholders,” the Australian oil and gas company said.

This is the third takeover offer the company received, all of which failed either due to offers being rejected or withdrawn.

In 2016, AWE received a $421.5 million proposal from Lone Star Japan Acquisitions, Ltd on behalf of the Lone Star Fund which was rejected by the company’s board.

The other offer was by Senex Energy in 2013. At the time, the offer was deemed not in the best interests of AWE shareholders and not appropriate to pursue.

Offshore Energy Today Staff

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