Under the terms of the agreement, Beach Energy will buy all the issued shares of Warrego Energy, at a price of $0.20 cash per share, along with net proceeds received from the sale of Warrego’s assets in Spain
Beach Energy to acquire Warrego. (Credit: Galen Crout on Unsplash)
Australian oil and gas company Beach Energy has signed an agreement to acquire Warrego Energy in an all-cash transaction valued at A$250m ($167m).
Under the terms of the agreement, Beach Energy will buy all the issued shares of Warrego Energy, at a price of $0.20 cash per share.
The transaction consideration will also include net proceeds received from the sale of Warrego’s assets in Spain.
The purchase price represents a 14% premium to Warrego’s closing share price on 10 November 2022, and a 30% premium to Warrego’s one-month VWAP to 10 November 2022.
The agreement is subject to customary conditions, including approval of Warrego shareholders, and approval by the Court, and contains customary exclusivity provisions.
The exclusivity provisions include reciprocal break fees, no shop, no talk and no due diligence obligations, and a matching right in favour of Beach.
In addition, it is subject to due diligence. Beach has already undertaken its preliminary due diligence and with plans to finalise confirmatory due diligence and negotiation deal promptly.
Beach CEO Morné Engelbrecht said: “We are pleased to have reached an agreement to proceed with the proposal to acquire Warrego. Beach’s cash offer represents compelling value for Warrego shareholders and provides Beach with complementary acreage in the Perth Basin.
“We look forward to completing the transaction with Warrego. Warrego’s exciting Perth Basin gas acreage represents an additional development opportunity for new gas supply beyond Beach’s Waitsia Stage 2 project and our gas exploration drilling which will soon commence.”
Last week, Warrego’s joint venture partner Strike Energy has announced that the two companies are in talks over a potential merger.
The current agreement scheme of implementation deed counters the equity takeover offer from Warrego’s joint venture partner Strike Energy.
Beach intends to finance the proposed acquisition through its existing debt facilities and cash reserves.
The company said that the acquisition, which is not subject to a financing condition, will complement its growth strategy in the Perth Basin, and the scheme.
The transaction will provide an additional development opportunity for new gas supply beyond Beach’s Waitsia Stage 2 LNG volumes and gas exploration drilling.
In addition, its strong balance sheet and expertise in development will not only further support the transaction but future gas developments in the Perth Basin, said Beach.