Norwest Energy has urged shareholders to refuse Mineral Resources’ (MinRes) unsolicited $403 million takeover offer, calling it “opportunistically timed”.
MinRes already owns a 19.9 per cent stake in Norwest and made an off-market bid to acquire the remaining stake on December 16 last year.
The Norwest board recommended rejecting the bid because it failed to properly recognise the value of the oil and gas company.
“MinRes is seeking to secure control of Norwest and its Perth Basin assets without paying an appropriate premium,” Norwest said in a statement.
“Accepting the offer would reduce shareholder exposure to the Lockyer project … while increasing their exposure to the risks associated with MinRes’ other businesses and commodities.”
The Lockyer project is a major gas discovery in WA’s Perth Basin that is seen as a future source of inexpensive gas to power downstream processing in the resources-rich state.
The rejection will likely be a blow to MinRes and its managing director Chris Ellison, who had called the offer a “no-brainer” that gave Norwest shareholders “a unique opportunity to join our MinRes family and be part of the next chapter in our significant growth”.
Norwest knocking back MinRes’ offer is the latest update amid considerable movement in mining companies looking to acquire gas assets.
Late last week, Gina Rinehart’s Hancock Prospecting increased its takeover bid for Warrego Energy after MinRes entered the fray for the Perth Basin gas player.
Hancock upped its bid to $0.36 per share, valuing Warrego at $440 million, after MinRes reportedly bought up 15 per cent of Warrego at $0.35 per share.