Talon gets takeover offer from Aussie JV partner Strike
Talon Energy, an ASX-listed company, received an unsolicited proposal from Strike Energy, another Australian company, regarding a potential change of control transaction for Talon, it said on July 25.
Both companies are partners in the Walyering gas field development project in Australia, with Strike holding a 55% interest and Talon holding the remaining 45% interest. Additionally, Talon has a 33% stake in a Mongolian coalbed methane project.
The proposal outlined that Talon would demerge its Mongolian assets to its existing shareholders, and then Strike would acquire all of the shares in Talon through a scheme of arrangement.
Under the terms of the proposal, Talon shareholders would receive 0.4586 Strike shares for every Talon share held, representing approximately 10.8% of the merged group, and they would also receive an ownership interest in Talon's Mongolian assets pro rata to their shareholdings in Talon.
The proposal was considered confidential and non-binding, indicating Strike's interest in the potential transaction without constituting a formal offer. Nevertheless, it came with certain conditions, one of which required Talon to enter into a process agreement with Strike. This process agreement would impose various restrictions on Talon, including granting Strike exclusivity during the evaluation period.
Strike requested a response from Talon, accepting all of the proposed terms, by July 23. However, on the same day, Talon wrote to Strike stating their intention to evaluate the proposal before providing access to due diligence. They informed Strike that they had appointed advisors to assist with the evaluation process and expected to respond to Strike's request for due diligence access in approximately one week.
Before Talon could formally respond or proceed with the due diligence process, Strike withdrew the proposal with immediate effect. Consequently, shareholders do not need to take any action in relation to the proposal, as confirmed by Talon.
It's worth noting that earlier in the year, Strike was involved in an unsuccessful bid for Warrego Energy, and later accepted Hancock Energy's cash offer for its stake in Warrego.