Feb. 13 (Bloomberg) -- WestSide Corp., a coal-seam gas explorer seeking to supply projects in Australia’s Queensland state, said it received a A$165 million ($177 million) takeover bid from a company that it didn’t identify.
WestSide received a cash offer of 65 Australian cents a share, the Brisbane-based company said in a statement today. That’s 91 percent more than WestSide’s closing price of 34 cents on Feb. 10, before its shares were halted.
“We do recognize it is a significant premium,” Chairman Angus Karoll said in a telephone interview, declining to identify the bidder. “We’ll act in the best interests of all shareholders and work proactively with the company that made the bid to get the best outcome.”
The gas explorer operates fields in Queensland about 160 kilometers (100 miles) west of Gladstone, where energy producers BG Group Plc, ConocoPhillips and Santos Ltd. are building more than $50 billion of liquefied natural gas projects to export the fuel to Asia. Arrow Energy Ltd., planning a fourth LNG venture in the state, bought gas supplier Bow Energy Ltd. at a 72 percent premium.
WestSide hired Moelis & Co. as a financial adviser, according to the company’s statement.
The board is evaluating the “highly conditional” bid, along with other options, WestSide said. “The board of WestSide has not formed a view at this stage as to the merits of the indicative proposal, and there is no guarantee that any formal, binding proposal will be received,” according to the statement.
Gas Sales Agreements
The shares rose 16 percent on Feb. 9 and another 3 percent on Feb. 10, valuing the company at A$86 million. The company has advanced 31 percent this year in Sydney, compared with a 5.6 percent gain for the benchmark S&P/ASX 200 index.
WestSide is working to expand its reserves and is negotiating “material” gas-sales agreements, Karoll said. Karoll owns about 17.3 million WestSide shares, or 6.8 percent of the company, according to data compiled by Bloomberg.
The company plans to feed the domestic market as well as the LNG developments on the central Queensland coast, according to Karoll.
“We are the closest producing coal-seam gas tenement to Gladstone,” Karoll said. “For a company looking to procure gas for the next two- to three-year period, we’re one of the few parties that can say we have the production licenses, the drilling rigs, the pipelines, and a significant amount of uncontracted reserves.”
Arrow, the coal-seam gas producer owned by Royal Dutch Shell Plc and PetroChina Co., completed a deal last month to buy Bow Energy for A$535 million. Arrow agreed in September to increase its takeover offer to A$1.52 a share in cash from A$1.48. That compares with Bow’s price of 88.5 cents in Sydney before Arrow made its initial offer on Aug. 22.
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