Analyst supports $602m Mitsui bid for AWE

An independent expert has joined AWE’s board in backing Mitsui & Co’s $602 million bid for the Perth Basin gas operator.

Peter Williams | The West Australian | 22 February 2018

The report by Grant Thornton declared the 95¢-a-share offer fair and reasonable, given it came within its valuation range for the oil and gas producer.

It valued AWE — 50 per cent owner and operator of the Waitsia onshore gas project near Dongara — at between 78¢ and $1.06. The report was contained in a target statement released by AWE yesterday.

Mitsui’s offer announced last month trumped earlier bids by China Energy Reserve and Chemicals Group and Mineral Resources.

AWE yesterday also issued a target statement for the 73¢-a-share bid by CERCG which called on shareholders to reject it.

A deal with MinRes with an implied value of 83¢ a share was called off when the mining company failed to match Mitsui’s bid.

Royal Bank of Canada analyst Ben Wilson said there were limited prospects of either MinRes or CERCG returning with a fresh bid.

Grant Thornton’s assessment of AWE’s worth was informed by a RISC Advisory valuation of the company’s exploration and early-stage development assets.

AWE’s shares closed 1¢ above the offer price at 96¢ yesterday.

The company in reporting half-year results reaffirmed Waitsia as a tier-one asset and one of Australia’s most prospective onshore gas fields.

“There’s real potential for that story to get even better,” managing director David Biggs told analysts.

Original article posted on The West Australian.

Picture: AWE