AsianOil: POSCO wins over Senex board with new bid

South Korea’s POSCO International has submitted a new bid for Senex Energy that has finally won the backing of the Australian developer’s board.
Senex said on November 8 that it had received a further improved non-binding proposal from POSCO to acquire 100% of the Australian firm for an all-cash offer of AUD4.60 ($3.42) per share.
This was POSCO’s fourth offer, with the South Korean company having offered AUD4.00 ($2.97) per share on July 30, AUD4.20 ($3.12) on August 27 and AUD4.40 ($3.27) on September 2.
Senex said its board intended to unanimously recommend that shareholders vote for the proposed transaction subject to certain conditions. These include negotiating an acceptable scheme implementation agreement, the absence of a superior bid from a third party and an independent expert concluding that the transaction was fair and reasonable.
Senex has agreed to extend POSCO’s exclusivity period to November 26, to provide time to negotiate and enter into a binding scheme implementation agreement and for POSCO to obtain internal approvals.
The announcement of the bid came the same day that Senex revealed that it had entered into a binding agreement with Australia Pacific LNG (APLNG) to acquire the undeveloped PL 209 and PL 445 gas fields for AUD80mn ($59.4mn), with that amount split into two tranches. An initial payment of AUD50mn ($37.1mn) will be followed by an AUD30mn ($22.3mn) payment subject to the receipt of Commonwealth environmental approvals. Senex intends to fund the acquisition with a bridge facility as well as existing cash and debt facilities.
PL 209 and PL 445 lie adjacent to Senex’s Atlas gas development and are expected to help boost that project’s output to 30 PJ (781.46mn cubic metres) per year in 2024. The developer is currently expanding Atlas’ production to 18 PJ (468.87 mcm) per year.
Senex said PL 209 and PL 445 included the 77-square km development-ready Northern Area, which holds 184 PJ (4.79bn cubic metres) of estimated ultimate recoverable (EUR) volumes, as well as the 77-square km Southern Area that is estimated to hold 600 PJ (15.63 bcm) of gas-in-place, but which still requires appraisal.
Senex said POSCO’s takeover offer included, and was dependent upon, the acquisition of the two gas fields. The deal is also still subject to various domestic and South Korean regulatory approvals.