China’s CERCG pulls out of AWE takeover race

China’s CERCG has withdrawn its off-market takeover offer to take over Australia’s AWE for cash consideration of $0.73 per share.

CERCG Bidder’s statement was sent to AWE shareholders on February 15. AWE said on Monday that the CERCG Offer “will be withdrawn effective as at 5.00pm (AEDT) on 27 February 2018.”

The effect of the withdrawal of the CERCG Offer is that no acceptances will be processed by CERCG, and CERCG will not pay any consideration to AWE shareholders who had accepted the CERCG Offer.

“On this basis, from the withdrawal date, AWE shareholders who had accepted the CERCG Offer will be free to deal with their AWE shares as they see fit,” AWE said.

To remind, AWE last week urged its its shareholders to accept the takeover bid from Japan’s Mitsui.

The Japanese company earlier in February offered to take over AWE for $0.95 per share, an increase compared to the previous bids by MinRES and CERCG.

AWE on Tuesday said:”The AWE Board continues to unanimously recommend that shareholders accept the offmarket takeover offer by Mitsui & Co., Ltd. (Mitsui) to acquire 100% of the shares in AWE for cash consideration of $0.95 per share (the Mitsui Offer), in the absence of a superior proposal.”

Mitsui has said that in case it acquires at least 75%, but less than 90%, of AWE’s Shares, it intends to cause AWE to apply to the ASX to delist. If it 90% or more of

AWE’s Shares it intends to remove AWE from the official list of the ASX and obtain the remaining Shares through compulsory acquisition procedures.

Mitsui’s Offer is currently scheduled to close at 7pm (Sydney time) on 23 March 2018, unless withdrawn or extended.

All eyes on Waitsia

The target company, AWE, is an independent Australian energy company with a portfolio of production, development and exploration offshore and onshore oil and gas assets in Australia, Indonesia and New Zealand.

AWE’s principal assets comprise: Waitsia Gas Project, various mature onshore gas fields and production facilities in the Perth Basin, Western Australia, including Beharra Springs; BassGas Project; Casino Gas Project; and Ande Ande Lumut Oil Project.

The bidding companies have been hoping to take over AWE mostly because of its Waitsia gas project.

AWE discovered the Waitsia field in September 2014. Further drilling and testing through to late 2017 culminated in AWE increasing its estimates of 2P Reserves for the field to 820 PJ (100% basis, 410 PJ AWE share) in December 20176 , and the Waitsia field now ranks in the top five largest onshore gas discoveries in Australia.

Waitsia is located in an established gas producing region of Western Australia, close to existing gas transportation and storage infrastructure and the Perth metropolitan demand center.

Offshore Energy Today Staff