Warrego Energy Limited (ASX: WGO) has entered into a Scheme Implementation Deed (SID) with Beach Energy Limited under which Beach has agreed to acquire all the issued shares in Warrego by way of scheme of arrangement.
Under the Scheme, Warrego shareholders would receive:
- Cash consideration of $0.20 per share; and
- If Warrego’s Spanish assets are sold, and such sale completes, within 12 months of implementation of the Scheme, the proceeds of such sale net of costs and taxes.
The Base Scheme Consideration of $0.20 per share represents a 36% premium to Warrego’s 1-month VWAP to November 9, 2022. The all cash consideration would also deliver cash certain value to Warrego shareholders for their shares.
The Scheme is subject to approval by Warrego shareholders, and by the Court, as well as other customary conditions.
Recommendation
The Board of Warrego (Board) unanimously recommends that Warrego shareholders vote in favour of the Scheme, in the absence of a Superior Proposal and subject to an Independent Expert concluding, and continuing to conclude, that the Scheme is in the best interests of Warrego shareholders.
Subject to those same qualifications, each Warrego Director has confirmed that they intend to vote any shares that they hold or control in favour of the Scheme.
This transaction provides an attractive outcome for our shareholders, with the certainty of cash proceeds,” Warrego Managing Director and CEO Dennis Donald said
“The premium offered to our share price recognises the strong underlying value of our assets as well as providing the ability to realise further upside from the future potential sale of Warrego’s assets in Spain”.
Scheme Implementation Agreement
The SID is subject to customary conditions for a transaction of this nature, including:
- Warrego shareholder approval;Approval by the Court;
- The Independent Expert concluding, and continuing to conclude, that the Scheme in the best interests of Warrego shareholders; and
- No Warrego Material Adverse Change and no Warrego Regulated Event occurring.
The SID contains customary exclusivity provisions, including no shop, no talk and no due diligence obligations, with the no-talk and no-due diligence provisions being subject to customary fiduciary carve- outs. The SID also contains a matching right in favour of Beach, and break fee and reverse break fee obligations.
Warrego is being advised by RBC Capital Markets as financial advisor and Allens as legal advisor.
