takeover!, page-39

Brisbane-based Senex Energy is believed to be behind AWE Limited’s takeover offer, with sources suggesting the two parties were in negotiations on Friday after Senex earlier presented its merger proposal.

The $619 million AWE went into a trading halt on Friday morning when it revealed it had received a conditional proposal for a merger, but stopped short of naming its suitor.

Sources said Senex, advised by Macquarie Capital, was the mystery party seeking to do a deal with the UBS-advised AWE.

The two companies could combine to create a $1.5 billion oil and gas explorer, with assets in Australia the United States and Indonesia.

Senex shares continued to trade on Friday and closed up 1.3 per cent to 77¢. A Senex spokesman could not be reached for comment.

AWE requested a trading halt until December 17.

BBY senior energy analyst Scott Ashton earlier told clients AWE would be attractive to an entity seeking a foothold in Australia and looking for upside potential in Indonesia, onshore Perth Basin and exposure to rising east coast gas prices.

“A merger proposal could potentially involve a combination of script and/or cash, but at the end of the day it’s going to come down to price and whether a premium is reflected in the proposal, i.e addressing a share price is ~30-40% discount to book value of the producing assets (~A$1.78ps),” the analyst wrote in an email to clients.