MEO Informs Shareholders to Reject Mosman Oil and Gas' Takeover Bid

MEO Australia Limited noted Wednesday the announcement made May 1 by Mosman Oil and Gas Limited (Mosman) and subsequent documentation distributed to MEO Shareholders, describing Mosman’s revised consideration and further extension of time (the Variation) to its offer to acquire all of the fully paid ordinary shares in MEO (Revised Mosman Offer).

Your Directors continue to recommend you REJECT the Revised Mosman Offer and simply do nothing in relation to any documents received from Mosman for the following reasons:

  • Mosman has limited cash and its ability to continue as a going concern remains uncertain. It has only conducted a small capital raising since announcing the original offer and its cash position is compounded by the estimate in its Replacement Bidder’s Statement that it expected to spend an estimated total of $502,006 (AUD 648,000) on the Offer
  • the majority of the exploration projects in the Mosman portfolio are in commercially unproven areas and some carry significant liabilities
  • the Mosman Share price has been volatile throughout the Offer period and the MEO Directors can have no confidence the Revised Mosman Offer will represent a premium or a discount to the price of MEO Shares at the close of the Revised Mosman Offer. Based on the respective share prices on closing May 22, the Revised Mosman Offer has an implied value of $0.0124 (AUD 0.016068) per MEO share, being a discount of 20 percent from the applicable MEO share price of $0.0155 (AUD 0.02) per share
  • trading shares on the UK based AIM Market is, for Australian based shareholders, typically more costly, more complex and takes longer than the ASX. Any Mosman Shares issued to MEO shareholders on the AIM market would be provided in a paper share certificate, which will not be able to be traded on AIM directly or via Australian based online trading platforms, and hence as a Mosman shareholder based in Australia you would need to use a broker to trade them
  • the Revised Mosman Offer is unconditional, however it is uncertain what consequences would arise should the AIM Rules require Mosman shareholders to approve the Revised Mosman Offer and that approval not be obtained. Mosman has not provided any disclosure in this regard
  • MEO’s portfolio has significant potential upside for MEO shareholders and MEO has already substantially cut corporate overheads. MEO is actively progressing projects across its whole portfolio, but in just the past three months has achieved important milestones
    • Beehive Prospect (WA-488-P): MEO recently announced that its wholly owned subsidiary had completed a 30 percent farmout to a wholly owned subsidiary of SGX-listed Rex International Holding and that the agreement includes options, which if exercised, will result in full funding of a 3D Seismic Survey and the Beehive-1 well with MEO retaining a fully carried 20 percent interest
    • Beehive Prospect (WA-488-P): MEO recently announced that it had been notified by the Titles Administrator that its application to vary the WA-488-P work program by suspending and extending Permit Year 2 by 6 months has been approved
    • Breakwater Prospect (WA-454-P): MEO recently announced that the WA-454-P Joint Venture had received notice from the Titles Administrator that its applications to vary the WA-454-P work program by extending Permit Year 4 by 6 months, and deferring the current well commitment from Permit Year 5 to Permit Year 6, had been approved; and
    • AC/P50 and AC/P51: MEO recently announced it had accepted an offer from the Titles Administrator to renew AC/P50 and AC/P51 for a further 5 year term. The firm minimum work program requirement is for the first three years of the renewal and for each block consists of geological and geophysical studies and seismic data reprocessing. The discretionary secondary term work program, Years 4 and 5, contain one well in each permit
  • MEO is in discussions with third parties concerning potential proposals, however there is no guarantee of a superior proposal at any future time. Shareholders should consider the timing of any planned acceptance of the Revised Mosman Offer as if a superior proposal by another party emerges, you will generally be precluded from accepting it if you have already accepted the Revised Mosman Offer

MEO shareholders should note that you have the right to withdraw your acceptance of the Offer if you accepted prior to the Mosman announcement May 1. If you wish to withdraw your previous acceptance of the Offer, you can do so by:

  • writing to Mosman within one month beginning on the day after the day on which you received Mosman’s Notice of Variation to request that your acceptance be withdrawn, care of Computershare Investor Services Pty Ltd at:

Computershare Investor Services Pty Ltd., GPO Box 52, Melbourne VIC 3001, Australia; OR

  • if you use a broker or an online share trading platform, contact them and they may be able to transmit a message to ASX Settlement for you

Attached is MEO’s fourth supplementary target’s statement in respect of the above. Capitalized terms are defined therein.

In the event of any queries, please contact MEO Australia on +61 3 8626 6000.


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