OIL and gas producer Beach Petroleum has extended its takeover bid for joint venture partner Drillsearch Energy by 29 days and waived all conditions, after a slow take-up by the target's shareholders.
The all-scrip bid will now close on August 14 instead of July 16 and is no longer subject to a 90per cent acceptance level.
Beach launched the all-share offer on May 5.
The bid values Drillsearch at $50 million.
Beach had a 5.3 per cent stake in Drillsearch at the time, which has since been lifted to 14.88 per cent.
Reg Nelson, managing director of Beach, said the offer was not being increased.
However, he said the 90 per cent condition had worked against the offer.
"Understandably, Drillsearch shareholders might have said 'what's the point, because you are not likely to get to 90 per cent'," he said.
"In the absence of a superior share offer, Drillsearch shareholders will be able to make a choice."
The original offer was rejected by the Drillsearch board on the grounds that it did not reflect the potential value of the company's reserves and resources.
"Certainly what we felt was a relatively friendly bid, with different factions on the board, (is) now labelled as being opportunistic," Mr Nelson said.
He said the deal would give Beach greater efficiency in exploring and developing assets in the Cooper Basin -- which straddles the Queensland-South Australian border -- particularly where it was in a joint venture with Drillsearch.
Beach's offer of one of its shares for every 27 Drillsearch shares notionally values the target at about 2.93c per share.
This compares to Drillsearch's closing share price yesterday of 2.9c, which was unchanged.
Beach also said it would offer brokers a handling fee of up to $750 if they initiated acceptances of the bid by Drillsearch shareholders and a binding takeover contract was formed.
State One Stockbroking resource analyst Sam Berridge said such an inducement was uncommon.
"But it does happen," Mr Berridge said, citing a similar commission paid to brokers under Graincorp's $210m share purchase plan, which closed oversubscribed yesterday.
BPT Price at posting:
77.0¢ Sentiment: Buy Disclosure: Held
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