Warrego Energy share price leaps 12% as takeover battle continues

The Warrego Energy Ltd (ASX: WGO) share price has started the week with a bang.

In morning trade, the energy explorer’s shares are up just short of 12% to 31.5 cents.

This means the Warrego Energy share price is now up 100% since this time last month.

Why is the Warrego Energy share price zooming higher again?

Investors have been scrambling to buy shares again after a bidding war broke out between Beach Energy Ltd (ASX: BPT) and Gina Rinehart’s Hancock Energy.

According to the release, Hancock Energy has increased its takeover bid from $0.23 per Warrego share to $0.28 per Warrego share. All other terms of its offer remain unchanged.

The release also reveals that the Warrego board has assessed the revised Hancock takeover offer and has determined that it is a superior proposal compared to the revised scheme proposal from Beach Energy.

Beach Energy’s revised offer was for an upfront cash consideration of $0.25 per share, plus the potential for additional scheme consideration if Warrego’s Spanish assets are sold within 12 months of implementation of the scheme.

What’s next?

Warrego Energy has now issued a notice to Beach Energy under the matching rights regime in the Beach Scheme Implementation Deed. This gives Beach five business days to match the revised Hancock Energy takeover offer.

Until Beach Energy has had an opportunity to match the revised Hancock offer, the Warrego Energy directors maintain their existing recommendation in favour of the Beach scheme proposal.

However, that will very likely change if Beach Energy doesn’t improve its offer, given how the company now regards the Hancock Energy as “superior”.

And let’s not forget that Strike Energy Ltd (ASX: STX) is a dark horse in this race. It tabled a merger proposal last month for 0.775 new Strike shares for each Warrego share held. Based on the current Strike Energy share price, this represents an offer price of 25.575 per share.

Why is Warrego Energy in demand?

All three companies appear to have their eyes on the company’s onshore assets in Western Australia’s prolific Perth Basin.

The company holds a 50% interest in EP469, including the West Erregulla gas project, and 100% of STP-EPA-0127, covering a massive 8,700 km2 (or 2.2 million acres).

The post Warrego Energy share price leaps 12% as takeover battle continues appeared first on The Motley Fool Australia.

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More reading

• 3 best-performing ASX 200 energy shares in November
• Why Bigtincan, Bubs, St Barbara, and Warrego shares are charging higher
• 3 ASX shares soaring on takeover bids today
• 5 things to watch on the ASX 200 on Friday
• Warrego Energy share price rockets 80% in a month amid clash of the takeover titans

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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