Warrego Energy share price slides as Hancock takeover offer trumps Beach

The Warrego Energy Ltd (ASX: WGO) share price has come off the boil as it appears the ongoing takeover battle for the company’s stock may have drawn to a close.

Shares in the ASX energy stock are down 3.3% in morning trade to 29.5 cents per share.

The Warrego Energy share price has leapt 30% over the past two weeks amid a bidding war as Beach Energy Ltd (ASX: BPT) and Gina Rinehart’s Hancock Energy have sought to gain controlling ownership of Warrego’s gas assets.

Earlier this week Strike Energy Ltd (ASX: STX) tossed its hat into the ring as well, reporting it was increasing its shareholding in Warrego to 19.9%.

Here are the latest developments.

What’s happening with the takeover battle?

The Warrego Energy share price is in the red after Beach reported it does not intend to match the revised Hancock takeover offer. Hancock had earlier lifted its offer from 23 cents per share to 28 cents per share.

The Warrego board noted that in the absence of a superior proposal it’s withdrawn its prior recommendation favouring the revised Beach scheme proposal. The board now “unanimously recommends that Warrego shareholders accept the Hancock takeover offer”.

At 28 cents per share, that’s 5% below the current Warrego Energy share price.

Addressing Strike Energy’s 19.9% ownership, the board said:

This increase in Strike’s percentage ownership of Warrego does not impact the availability of the revised Hancock takeover offer, which … is not subject to any minimum acceptance condition.

Commenting on the decision, Beach CEO, Morné Engelbrecht said:

The multiple party bidding process for Warrego has reinforced our view of the value of our dominant acreage position in the Perth Basin and encourages us to expand our current active exploration drilling program in one of the most exciting gas plays in Australia.

Warrego Energy share price snapshot

The Warrego Energy share price, shown in the chart below, has soared 143% in 2022. That compares very favourably to the 7% year to date loss posted by the All Ordinaries Index (ASX: XAO).

The post Warrego Energy share price slides as Hancock takeover offer trumps Beach appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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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