Warrego Energy Limited (“Warrego”, WGO) notes recent increased trading activity in its shares and advises that it received a non-binding and indicative proposal from Strike Energy Limited (“Strike”) under which Strike would acquire all of the shares in Warrego that it does not already own via a scheme of arrangement (the “Proposal”).
Under the Proposal, Warrego shareholders would receive:
- 0.775 new Strike shares for each Warrego share held; and
- if Warrego's Spanish assets are sold, and such sale completes, within 12 months of implementation of the scheme, additional scheme consideration described below.
Under this Proposal, Warrego shareholders would own approximately 30.5% of the combined group. Warrego would have the right to appoint one Board member to the Board of the combined group.
Contingent scheme consideration if a sale of the Spanish Assets is completed within 12 months
As part of the Proposal, Strike is required to use reasonable endeavours to market and sell the Spanish assets. If those assets are sold, and such sale is completed, within 12 months following implementation of the scheme, Strike will be required to pay, as additional consideration for the Warrego shares transferred under the scheme, the net proceeds of sale of the Spanish assets (net of all taxes and costs). Any such consideration would be in addition to the scrip consideration to be provided by Strike for Warrego shares under the scheme.
The Warrego Board considers the Proposal is at a sufficient level to merit further review and has determined to grant due diligence access to Strike. Warrego is also undertaking due diligence on Strike in order to determine whether to recommend a transaction to its shareholders.
In addition, it is negotiating the potential terms of a scheme implementation deed that would govern any transaction.
Any scheme implementation agreement entered into between the parties would itself be subject to a number of conditions including Warrego shareholder approval.
The Warrego Board will update shareholders and the market in due course. Shareholders do not need to take any action in relation to the Proposal at this stage. There is no certainty that the Proposal will result in a transaction.
Authorised by the Board of Warrego Energy Limited