PERTH (miningweekly.com) – Suitor Aurora Funds Management has raised concerns with the Australian Securities and Investment Commission and the Australian Securities Exchange over recent actions from takeover target Molopo Energy.

Molopo this week informed shareholders that the company had taken full ownership of the Orient oil and gas project, in the US, after redeeming its joint venture partner’s shares in Orient, and committing to funding the project in full to the tune of some $21-million.

Molopo subsequently partnered with Drawbridge Energy Holdings, which saw Molopo transferring the entire Orient project into Orient RFC US, and transferring ownership of this newly minted vehicle to Drawbridge Holdings in return for a 30% interest in Drawbridge Holdings.

Molopo told shareholders in its quarterly report that the Drawbridge transaction reduced the company’s interest in the Orient project, while giving it an indirect interest in additional oil and gas projects in the US.

The company argued that if the Orient project had been maintained as the sole focus of Molopo, the company would have been overly reliant on one project, while the diversified portfolio from Drawbridge, which includes producing units, both reduced risk and increased Molopo’s prospects for oil and gas exploration.

However, Aurora has raised concerns that the transfer of the Orient project took place without shareholder approval, and appeared to be in contravention to the ASX-listing rules, while also being in breach of the conditions imposed by the Aurora takeover bid.

“Aurora is very concerned by the nature, timing and disclosures of these activities undertaken by Molopo, in circumstances that are contrary to the defeating conditions in the Aurora takeover bid,” the company said in a statement.

It noted that it was currently considering the impact that Molopo’s actions would have on its takeover bid.

The asset manager in September last year revised its takeover bid for Molopo after Molopo triggered a defeating condition in the original bid with the A$8.75-million acquisition of its initial 50% interest in the Orient project.

Aurora in September amended its takeover offer for Molopo from the original 18c a share to 13.5c a share, which Molopo shareholders could elect to receive in either cash or the equivalent value in Aurora shares.

The cash offer was capped at A$5-million.

WAM Capital subsequently also announced intentions to make an off-market takeover bid for Molopo, under which shareholders would be offered 13.5c a share in cash.

Molopo has maintained that the Aurora offer presented a “clear and significant” liquidity risk to its shareholders, with the company advising shareholders to reject the offer.