AFTER being humbled by the Takeover Panel over its too-close association with Keybridge Capital and shareholders rejecting its move to seize board control, Aurora Funds Management moved to launch a takeover for cashbox Molopo Energy this morning.
The fund wants access to Molopo's $67 million in cash by hook or by crook, and has announced its plans to launch a mixed cash and scrip offer for $0.18 per share, although the cash component is capped at just $5 million and will be scaled back above that level.
Every acceptance above the $5 million cap will be offered in Aurora Fortitude Absolute Return Fund units, part of Aurora's listed managed investment scheme with initial net assets in excess of $75 million.
Aurora said its offer was about 30% above recent trading averages and 28.6% above the recent closing price yesterday, but Molopo may have already triggered one of the defeating conditions.
Yesterday it entered a trading halt pending an announcement about a strategic investment, but is yet to provide any information on its plans, although it has previously talked up its desire to remain in the North American oil patch.
Molopo risks being suspended from the Australian Securities Exchange on July 31 if it cannot demonstrate a sufficient level of oil and gas operations.
This morning Molopo, which is yet to react to Aurora's latest gambit, said it had completed its investment transaction and hoped to provide more details before the start of trade on Monday.
Aurora wants at least 50.1% acceptance, and it has warned that any investment worth just $2 million would be enough to be counted as a defeating condition.
The fund said its bid was "an attractive alternative to the current uncertainty and lack of strategic direction at Molopo".
As a major shareholder, in concert with Keybridge, Aurora wants to return most of Molopo's cash to shareholders, namely itself and Keybridge, with whatever is left in the kitty to be invested to cover Molopo's legal liabilities in Canada.
Once those are settled whatever is left would also be returned to shareholders.
Aurora and Keybridge have a combined stake of 20.52%, with a previous further stake of 17.35% that was acquired in contravention of the Corporations Act being held by ASIC.
ASIC has around six months to sell the shares on market, so it is convenient there is a takeover offer in the wind.
Molopo shares were 14c this morning.
MPO Price at posting:
14.0¢ Sentiment: None Disclosure: Held
