Mineral Resources (ASX: MIN) has announced its intention to make an off-market takeover bid to acquire every issued fully paid ordinary share in Norwest Energy (ASX: NWE) that it does not already own.
Norwest is MinRes’ minority joint venture partner in the Lockyer Deep gas project in the Perth Basin.
MinRes intends to offer one fully paid ordinary share in MinRes for every 1,367 Norwest Shares held on the register date. The offer implies an offer price of $0.06 per Norwest share.
Norwest’s principal asset is a non-operating interest in onshore Perth Basin exploration permits EP 368 (20%) and EP 426 (22.22%). MinRes and its subsidiaries are the permit operators and owners of the remaining interest in EP 368 and EP 426.
MinRes is also the largest shareholder in Norwest, holding approximately 19.9% of Norwest shares on issue. The offer excludes Norwest shares already held by MinRes.
MinRes is an ASX 50 company and, since its listing in 2006, has delivered the second-best Total Shareholder Return of any stock in the ASX 200.
- MinRes’ offer is one (1) fully paid ordinary MinRes Share for every 1,367 Norwest Shares held on the register date (subject to the satisfaction or waiver of the condition to the offer).
- The scrip nature of the offer means Norwest shareholders will retain their exposure to EP 368 and EP 426 – including the Lockyer Deep gas discovery – but will no longer be exposed to funding and development uncertainties.
- The offer will enable Norwest shareholders to participate in the future success of MinRes – including dividends – delivered by MinRes’ portfolio of mining services, lithium, iron ore and energy operations.
- The implied offer price of $0.06 per Norwest share represents an equity value for Norwest of approximately $403 million.
- The offer is attractively valued, with the implied offer price representing:
- a premium of 33% to the closing price of Norwest shares on ASX on 15 December 2022;
- a 27% premium to the one-month volume weighted average price of Norwest shares up to and including 15 December 2022; and
- an 11% premium to the 52-week high closing price of $0.054 for Norwest shares on ASX on 30 August 2022.
- Norwest shareholders may be eligible for rollover relief on any capital gains tax obligations.
- The Offer is not subject to a minimum acceptance condition.
MinRes expects to lodge its Bidder’s Statement in the coming days and for its offer to open for acceptance by Norwest shareholders in early January 2023.
Commenting on the intention to bid for Norwest, MinRes managing director Chris Ellison said:
“MinRes has become one of Australia’s most successful companies because of our ability to identify and act early on opportunities that benefit all of our shareholders.
“We started accumulating what is now the largest acreage position in the onshore Perth and Carnarvon Basins in 2015 with a clearly articulated strategy to lock in a low-cost, long-life energy supply for our operations. This strategy also aligns with MinRes’ pathway to reducing our carbon emissions by 50% by 2035 and net zero emissions by 2050.
“The significant conventional gas discovery we made at Lockyer Deep last year, which we believe may be the largest onshore gas find in Australia, is driving us to develop and commercialise this high-quality energy source as quickly as possible.
“The scrip-based offer for our JV partner Norwest will consolidate Lockyer Deep’s project ownership and provide Norwest shareholders with exposure to a bigger prize. It is also a natural progression that can create lasting value for both groups of shareholders under the MinRes ownership umbrella.
“MinRes has a proud history of successfully building, owning and operating resources projects in Western Australia. We have a strong and highly experienced Energy team, led by Shelley Robertson, that has access to MinRes’ project development expertise and balance sheet.
“This offer presents a compelling and unique opportunity for Norwest shareholders to join the MinRes family and be part of the next chapter in our significant value creation.”