Long story short – the Independent Valuer's report appears out of date as valuations are based on 16 November 2021. The market has moved materially since then and
the underlying assumptions should be updated and presented to shareholders before the final vote in March.
The number 1 reason shareholders have been recommended to accept this offer according to the scheme booklet is because –
“the Independent Expert has concluded that the Scheme Consideration is fair and reasonable and in the best interests of Senex Shareholders”
Page 121 of the Scheme booklet Note 1 indicates that the Market capitalisation and EV of our peer comparatives are calculated as at 16 November 2021. The forward curves of the underlying commodities have moved materially since that date as reflected in the share prices of those companies. This valuation is still materially lower than our peers as observed in the updated analysis in
Table 3 below.
There are many moving parts in such valuations, not to mention the fundamental changes undergone by some of our peers in the interim. The conclusion is not that the company is precisely 17% undervalued by the current offer, but that the "Independent Report" presented a valuation that was materially below our peers and due to subsequent movements in the energy markets, can no longer be relied upon by the directors.
Table 1 – Valuation – Senex (Independent Expert Report Pg. 120)
Table 2 - Valuation – Peer Group (Independent Expert Report Pg. 121)
Table 3 - Valuation - Update and restatement of Tables 1&2 from the Independent Report
Note 1: Weighted Atlas and Roma North valuations in table 1 with respect to their share of 2P reserves reported in August 21 Reserves Update in order to calculate a consolidated figure for Senex.
Note 2: Removed from peer analysis:
Strike Energy - due to the fundamental change with respect to the Walyering gas field
Central Petroleum - due to the significant difference of the debt profile
Comet Ridge - due to the material difference in the size of the entity.