Ambassador board not taking sides in bidding war
PERTH (miningweekly.com) – The directors of takeover target Ambassador Oil & Gas have stayed on the fence in the bidding war between suitors New York-listed Magnum Hunter Resources and ASX-listed Drillsearch Energy.
Drillsearch last month hiked its offer from one of its own shares for 5.4 Ambassador shares, adding 5c cash for every Ambassador share, which prompted Magnum to also increase its offer from one of its own shares for every 27.8 Ambassador shares held, to one of its own shares for every 23.6 Ambassador shares held.
Magnum Hunter turned to the Australian Takeovers Panel after Ambassador’s nonexecutive chairperson David Shaw, and MD Guistino Guglielmo, who collectively hold 26.43% of the company’s shares, accepted the Drillsearch offer.
Ambassador on Monday told shareholders that the company had now reviewed both offers, and concluded that the Magnum Hunter offer implied a value of A$0.368 a share for Ambassador’s shares, while the Drillseach offer implied a value of A$0.333 a share.
As a result, the company was advising shareholders to accept the Magnum Hunter offer if shareholders wished to receive a higher implied premium for its shareholding, and preferred to have an investment in a larger New York-listed entity.
However, Ambassador also said that if shareholders would like to retain and increase their exposure to the Cooper basin, they should accept the Drillsearch offer.
Shareholders were also urged to accept the Drillsearch offer if they intended to liquidate their investment in the short term.
While Shaw and Guglielmo have accepted the Drillsearch offer, the remaining director Emmanuel Correia has made no concrete decision around his own 100 000 Ambassador shares.
The Magnum Hunter offer will close on July 23, while the Drillsearch offer will close on July 14.
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