Australia's Cue Energy Resources Ltd.'s directors recommended that company shareholders should reject the unsolicited, on-market takeover offer by NZOG Offshore Limited, a wholly owned subsidiary New Zealand Oil & Gas Ltd., chairman Geoffrey King said in a letter Tuesday.
NZOG Offshore offered Feb. 12 to acquire all of the shares in Cue Energy that it does not already own at $0.0765 (AUD 0.10) per share, or $0.00765 (AUD 0.01) per share higher than the previous day's closing price of Cue Energy shares.
Cue Energy noted that shareholders own part of a growing oil and gas producer with a focus on Southeast Asia and Australasia. The firm has strong production assets, an active exploration program and a robust balance sheet with no debt and cash reserves of $28.3 million (AUD 37 million, with those cash reserves equivalent to $0.0405 or AUD 0.053 per share).
The directors commented that the offer price is inadequate and substantially undervalues Cue Energy shares citing:
They therefore "unanimously recommend that you (shareholders) reject the offer," the chairman said in the letter released Tuesday.
Meanwhile, the directors have appointed Grant Samuel to prepare an Independent Expert's report to look into whether or not the offer is fair and reasonable to Cue Energy shareholders. The Independent Expert's report is expected to be released to the Australian Securities Exchange on or about March 2.
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