Oz Strike and UIL to Merge
Australian Strike Energy has entered into a takeover arrangement with Perth Basin-focused UIL Energy, Strike said October 22.
The binding Takeover Implementation Deed will see Strike make a conditional off-market takeover offer to acquire all of the issued shares of UIL at an offer price of 0.485 Strike shares for each UIL ordinary share.
“This transaction plays to Strike’s strengths of being a low cost and high-impact on-shore exploration and appraisal operator, which makes it an extremely attractive opportunity for both UIL Energy and Strike Energy shareholders alike,” Strike chairman John Poynton said.
“The Merged Group will be well capitalised to execute on the Perth Basin strategy whilst continuing to progress the Southern Cooper Basin Gas Project, which is approaching a key milestone in proving commercial success,” he said.
In the absence of a superior proposal and subject to a condition that Strike raises A$13 million, the UIL directors intend to accept the offer and unanimously recommend that shareholders do the same.
“This is a compelling offer for UIL Energy shareholders to participate in a combination of Strike Energy and UIL Energy with significant positions in both the Perth Basin and Cooper Basin, and the potential to supply gas to both the West Coast and East Coast markets,” UIL chairman Simon Hickey said.
“Both Strike Energy’s interest in the West Erregulla block and our portfolio enhances the likelihood of a merged entity becoming a substantial operator in the Perth Basin. The West Erregulla prospect, expected to be drilled in early 2019, along with Strike Energy’s current Jaw’s project, provides UIL Energy shareholders with exposure to highly prospective and significant projects,” he said.
The deal implies an indicative offer price for UIL Energy of A$0.0703 per share and an indicative undiluted market capitalisation of A$16.1 million.
The offer is subject to a minimum acceptance of 50.1% and does not require any regulatory action. Strike intends to lodge the bidder’s statement in the coming days and UIL’s response is expected a short time thereafter.