A bidding war has emerged for Australian oil and gas explorer AWE Ltd. after Perth-based Mineral Resources Ltd. made an all-share takeover offer, challenging an increased all-cash bid by China Energy Reserve & Chemicals Group Co.
Mineral Resources, which mines lithium and iron ore, offered 1 share for every 22.325 AWE shares, valuing the bid at 80 Australian cents a share, AWE said Monday in a filing. The offer, which is not conditional on due diligence, tops a revised 73 cents a share bid made Friday by China Energy Reserve.
AWE gained as much as 13 percent and traded at 81.25 cents as of 11:13 a.m. Monday in Sydney. Mineral Resources was down 5.4 percent.
AWE said it will study both takeover proposals and provide shareholders with a recommendation in due course. China Energy Reserve, a company linked to energy giant China National Petroleum Corp., first submitted a 71 cents a share offer on Nov. 30 which was rebuffed by AWE. It returned Friday with a deal valuing the Sydney-based company at A$463 million ($348 million).
AWE, which has rejected two other takeover offers in the past four years, holds a 50 percent stake in the Waitsia field in Western Australia, which it says is the largest onshore conventional gas discovery in the nation in the past 40 years and could supply up to about 10 percent of the state’s domestic needs.
Mineral Resources said the acquisition would fit with its strategy of securing gas assets. No gas would be sold offshore from the Waitsia project should the bid be successful, the company added.