AWE Rejects Senex's Takeover Proposal

AWE Limited on Monday said that it has considered and rejected a non-binding and conditional scrip based takeover proposal from Senex Energy Limited.

Media reports last week has reported about Senex’s takeover proposal as AWE’s scrip went into a trading halt.  

“The Board determined that Senex’s proposal was not in the best interests of AWE shareholders and accordingly was not appropriate to pursue. Following the meeting of the AWE Board, AWE verbally advised Senex of this decision on 15 December 2013. Subsequently, Senex has written to AWE to formally withdraw its offer,” AWE said in a statement.

According to the statement, Senex had proposed that it would issue 1.9 Senex shares for every 1 AWE share, which would have resulted in the equity in the merged group being held 53% by Senex shareholders and 47% by AWE shareholders.

The AWE Board considered the proposal not to be in the best interests of AWE shareholders, taking into account:

 • AWE's view that the offer significantly undervalued AWE shares without an appropriate premium for control; and

• The relative market valuations of the companies. Under Senex's takeover proposal, AWE would contribute a substantially greater share of 2P reserves (70%), total production (80%), sales revenue (67%) and EBITDAX (67%), however AWE shareholders would receive only 47% of the merged group equity.

“While the Board of AWE recognises the potential to add shareholder value through material M&A transactions, it remains confident of the Company's ability to create further value for shareholders through the ongoing commercialisation of AWE's existing portfolio of opportunities, which are primarily near term development in nature. AWE has recently advised the market that it is aiming to double production and triple cash flow by 2017,” AWE said.

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