Magnum raises takeover stakes

Value up: Another increase in price of takeover deal

Magnum Hunter Resources has weighed in on the bidding war for Ambassador Oil & Gas, increasing its offer price for the company.

The company is now offering one Magnum share for every 23.6 Ambassador shares, representing a price of A$0.381 (US$0.35).

It has also offered Ambassador shareholders the option to take cash instead of Magnum stock by participating in a sale facility.

Under the sale facility, Magnum stock will be issues to a nominee who will arrange the sale and give the cash proceeds to Ambassador shareholders.

Magnum has also said the offer was unconditional.

The company said the new deal was a 15% jump on the recently-announced revised offer from Drillsearch Energy.

Drillsearch announced on Monday it revised its takeover offer for Ambassador.

The takeover deal is now worth 1 Drillsearch share for every 5.4 Ambassador shares plus A$0.05 cents extra per share.

Drillsearch recently took a 19% stake in the company, nudging ahead of Magnum.

Magnum’s new offer is a 95% premium on Ambassador’s shares as of 23 May, the final day it traded before entering into a trading halt.

“Magnum Hunter notes the announcement made by Drillsearch yesterday and believes that the revised Magnum Hunter offer is superior to the revised Drillsearch offer,” the company said in a statement.

The company also said it was superior in terms of daily production, market capitalisation and enterprise value.

Late Monday night, Ambassador shareholders which hold a collective interest of about 26.43% chose to accept the Drillsearch offer.

“Magnum Hunter is concerned that such actions have denied Ambassador shareholders the opportunity to participate in the improved Magnum Hunter offer, and have delivered control of Ambassador to Drillsearch to the detriment of Ambassador shareholders.

“Magnum Hunter is concerned that such acceptances have not taken place in an efficient, competitive and informed market and are inconsistent with the actions that would normally be associated with achieving the best possible outcome for Ambassador shareholders.”

The company said it was making an application to the Australian takeover panel.

User

Become an Upstream member!

Membership includes a subscription to our weekly newspaper providing in-depth news from the energy industry, plus full-access to this site and its archives. Still not convinced? Try our free trial.

Already a member?

Login