Takeover target Norwest Energy on Tuesday urged shareholders to reject a takeover offer from fellow listed Mineral Resources (MinRes).
MinRes last week opened its off-market takeover offer for Norwest Energy, offering one fully paid MinRes share for every 1 367 Norwest shares held, implying a value of 6c per Norwest share.
The offer does not have a minimum acceptance condition and is currently scheduled to close on February 6.
In its target statement released on Tuesday, Norwest Energy stated that the unsolicited takeover offer did not appropriately value the company’s Perth basin assets, and had been opportunistically timed prior to the full extent of the Lockyer discovery becoming known.
The target statement stated that MinRes was seeking to secure control of Norwest and its assets without paying an “appropriate” premium for control, and warned shareholders that by accepting the offer and becoming a MinRes shareholder, they would reduce their exposure to the Lockyer project and adjacent exploration upside while increasing their exposure to the risks associated with MinRes’ other businesses and commodities.
Norwest’s principal asset is a non-operating interest in onshore Perth basin exploration permits EP 368, in which it holds a 20% interest, and EP 426, in which it holds a 22.22% interest. MinRes and its subsidiaries are the permit operators and owners of the remaining interest in EP 368 and EP 426.
MinRes last week acquired a 16.35% in takeover target Warrego Energy, which holds the West Erregulla discovery which is adjacent to the EP 368 permit.