More hot air at Quadrant Energy as Beach takes a dip

More hot air at Quadrant Energy as Beach takes a dip

• Street Talk
• Jun 15 2018 at 12:15 AM
• Updated Jun 15 2018 at 12:15 AM

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Beach Energy boss Matt Kay is ambitious and the market likes it. Supplied

• by
• Sarah Thompson
• Anthony Macdonald
• Julie-anne Sprague

It seems the dealmakers at Beach Energy haven't packed away their acquisition ambitions just yet.
Hot on the heels of Beach Energy's "transformational" $1.585 billion purchase of Origin Energy's conventional upstream oil and gas arm late last year, sources said Beach Energy had moved on to thinking about a potentially bigger target.

Street Talk understands Beach has been in and around the sale process for Quadrant Energy; the WA oil and gas business owned by a bunch of investors spearheaded by financial types at Brookfield Asset Management and Macquarie Group.

Quadrant's owners have tried a few different exit routes this year. There was an aborted initial public offering attempt, before Brookfield had advisers Citi and Goldman Sachs try to offload its half share in the business.

Since then, sources said both Brookfield and Macquarie realised it may be better to work together - a big slice in the business may be more valuable to a buyer than a 50 per cent stake.

Street Talk understands Beach Energy has been in and around the data room.
Sources said it had received some data, at the very least, and considered how Quadrant Energy's portfolio could fit into its ambitious management and shareholders' long-term plans.

It remains to be seen whether its tyre-kicking comes to anything, but CEO Matt Kay is driving the ship knowing major shareholder Seven Group - whose own shares are at all-time highs - is supportive of growth.
A Beach Energy spokesman could not be reached for comment on Thursday.

The big thing for Quadrant Energy would be to lure Santos into the process.
The oil and gas player had a quick look back before Harbour Energy re-arrived on the scene in April, and as Street Talk has written, there is plenty of smoke around its intentions now.

Beach Energy could be one way for Quadrant Energy to lure Santos into the process. You would have to think Santos would be keen to stop Beach Energy in its tracks. Beach Energy is expanding quickly and Santos would no doubt like to defend its market position.

Quadrant Energy would be a big bite for Beach Energy and any deal would come as it is trying to bed down its Lattice Energy portfolio. But there is no doubting the company's team has both ambition and the market's blessing to try and replicate something like a Santos. And while it is early days, the way its Lattice acquisition was structured also showed some sophistication.


More hot air at Quadrant Energy as Beach takes a dip

Cheers,
xmagx