AWE Limited has resisted a proposal from China Energy Reserve and Chemical Group for the acquisition of 100% of its shares.
AWE revealed that the unsolicited, non-binding, indicative, and conditional offer came from China Energy Reserve and Chemical Group’s (CERCG) Australian subsidiary.
The company said China’s state-owned CERCG wanted to acquire 100% of its shares on a fully diluted basis, at a price of $0.71 cash per share under either a recommended takeover bid or a scheme of arrangement (indicative proposal).
The total cash consideration for a 100% share acquisition stands at around $430 million. The $0.71 per share offer by CERCG is higher than the $0.55 and $0.545 closing prices of shares the company reported on Thursday, November 31.
AWE’s stock price soared on Friday after the offer was revealed to $0.67 and was trading at $0.70 at press time.
The indicative proposal includes the acquisition of any shares that are issued by AWE under the recently announced share purchase plan that is currently scheduled to close December 14.
AWE did disclose the receipt of the indicative proposal before the company’s board concluded its assessment of the proposal, but its initial reaction was that the proposal is “not sufficiently attractive to provide access to due diligence.”
“AWE shareholders do not need to take any action in response to the Indicative proposal at this stage,” AWE said, adding it has appointed UBS AG, Australia Branch as financial advisor and Allens as legal advisor.
In 2013 AWE rejected a takeover bid from Senex. Similarly, in 2016 it resisted a $421.5 million buyout proposal from Lone Star Japan Acquisitions, Ltd