Mineral Resources (MinRes) last week finally secured control of oil and gas exploration company Norwest Energy. But how did it all start?
Major mining companies have been battling for control of WA gas assets since thebeginning of the year.
WA gas sites are a source of inexpensive gas for power generation and mineral processing, which will prove especially important as the resources sector faces a more difficult fossil-fuel market in coming years.
It started with Perth Basin gas player Warrego Energy attracting takeover bids from Hancock Prospecting, MinRes, Strike Energy and Beach Energy.
MinRes and Beach Energy eventually dropped out the race, with MinRes (somewhat mysteriously)selling its Warrego sharesinto Hancock’s takeover offer on February 7.
On February 9, Strike alsobowed out, leaving Hancock in the prime position to take control of Warrego.
But while Strike and Hancock were battling over Warrego, MinRes was setting its sights on Norwest Energy.
MinRes had originally made anunsolicited takeover offerof $403 million for Norwest on December 16 2022; however, Norwest ultimately knocked backthe deal.
At that time, MinRes managing director Chris Ellison called the offer a “no-brainer”. Norwest, on the other hand, called it “opportunistically timed”.
“MinRes is seeking to secure control of Norwest and its Perth Basin assets without paying an appropriate premium,” Norwest said in a statement.
“Accepting the offer would reduce shareholder exposure to the Lockyer project … while increasing their exposure to the risks associated with MinRes’ other businesses and commodities.”
On January 16, MinRes signalled its determination to get a deal done by publicly urging Norwest shareholders to accept the offer. This urgingtook the formof a full-page advertisement in theAustralian Financial Reviewrefuting the Norwest board’s assertions about the offer.
But the advertisement failed to gain the acceptance MinRes was seeking, and a revised offer was made soon after.
The sweetened offer of $497 million won over the Norwest board on January 27.
“The Norwest board is satisfied that MinRes’ improved offer is now a good deal for shareholders, and in the absence of a superior offer, unanimously recommends shareholders should ACCEPT the revised offer before it closes,” Norwest chair Ernie Myers said.
“We have worked with MinRes in the interest of our shareholders to achieve the valuation and terms reflected in its revised offer.
“The revised offer provides Norwest shareholders with an opportunity to maintain an interest in the Lockyer project through an investment in MinRes, being a company with significantly greater balance sheet strength and underpinned by a diverse portfolio of operations.”
Finally, on February 16, MinResgained controlof Norwest.
MinRes’ voting power in Norwest increased to 53.86 per cent, giving the mining services company control.
In accepting, Norwest shareholders will receive one fully paid ordinary MinRes share for every 1300 Norwest shares.
The closing date for acceptance by Norwest shareholders is now extended to March 2, at which point it will become clear if MinRes has gained the full approval of all Norwest shareholders.
