Neon Energy Limited has pulled out of a proposed merger agreement with MEO Australia.
Under the proposed merger announced in November, MEO shareholders would receive 0.7369 Neon shares for each MEO share they hold. Following implementation of the Merger, Neon shareholders and MEO shareholders would each hold 50% of the Merged Group.
However, Neon on Friday, December 19, received what it described as a ‘superior proposal’ to the merger with MEO.
Namely, Evoworld Corporation, offered to make a proportional off-market takeover offer for 50% of the ordinary shares in Neon not owned by Evoworld.
Evoworld will offer Neon shareholders A$0.038 per Neon share for 50% of their holding, subject only to Neon shareholders approval.
Neon Board has resolved to recommend the Evoworld offer to Neon shareholders.
As a result, Neon has terminated the merger implementation agreement with MEO and paid the reimbursement fee of A$400,000 to MEO.
As for MEO Australia, the company has said it now expects Mosman Oil and Gas Limited (Mosman) to proceed with its intention to make an off-market takeover bid for all of the shares in MEO as announced to the market on December 11, 2014. In its announcement, Mosman has stated that it intends to serve MEO with its bidder’s statement in early February 2015.
“The Board of MEO will consider its opinion on the Mosman Proposal in light of the potential termination of the MIA with Neon. Shareholders are advised to take no action in relation to the Mosman Proposal or any document received from Mosman until they receive the MEO Directors’ formal recommendation regarding the Mosman Proposal,” MEO Australia said in a statement.