South Korean company Posco International is in discussions over a potential takeover of the Australian onshore oil and gas producer Senex Energy.
On 2 September, Senex received a revised non-binding and indicative proposal from Posco to acquire 100% of Senex for a cash offer price of A$4.40 per share — which values the company at about A$800 million.
This followed the submission of prior non-binding proposals on 30 July at A$4.00 per share, and 27 August at A$4.20 per share.
Senex is currently trading at about A$4.50.
Senex said it granted Posco a period of exclusivity on 15 September to complete due diligence and to further advance the proposal.
Senex has now agreed to extend Posco's exclusivity period to 5 November "in order to provide Posco International with additional time to assess a further revised proposal at a price higher than A$4.40 per share".
Posco has indicated to Senex that if a transaction proceeds, it is likely to be implemented by way of an off-market takeover offer which would be subject to a 50.1% minimum acceptance condition and Foreign Investment Review Board approval. However, the transaction would not be subject to a financing condition.
Any such offer from Posco will be subject to various pre-conditions.
Senex is a consistent performer in Australia, with annual production in the year ending 30 July of 3 million barrels of oil equivalent, up 140% on 2020.
Its annual revenue was A$110 million, and underlying Ebitda was up 178% year on year at A$55 million. The company's proven and probable reserves were 767 petajoules.
Posco International is listed on the Korea Stock Exchange with a market capitalisation of US$2.4 billion as of 15 October 2021.
The company specialises in oil and gas exploration and production, LNG, agri-resources and steel trading.
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