88 Energy declares XCD takeover unconditional as it reaches 60% stake
88 Energy now holds a 59.27% stake in XCD Energy and has declared its takeover offer unconditional.
88 Energy (ASX: 88E) is on track to create a more powerful Alaska oil and gas player as it declares its takeover offer for XCD Energy (ASX: XCD) unconditional.
The company now holds 59.27% of XCD Energy’s shares and 28.53% of the listed options.
The takeover offer is currently scheduled to close a week from now, at 7.00pm on June 25.
88 Energy says the offer deal has been declared final and will not be increased. It is offering 2.4 new shares for every one XCD Energy share and 0.7 new share for every XCD Energy listed option.
The XCD Energy board continues to unanimously recommend acceptance of the takeover offers in the absence of a superior proposal and subject to the independent expert concluding that the offers are reasonable, said 88 Energy in its statement.
Payment terms are to be accelerated
Payment terms have been accelerated to seven business days after receipt of valid acceptances. Those XCD Energy shareholders who have already accepted will receive their new 88 Energy shares by June 26.
88 Energy confirmed that if it reaches 90% of XCD Energy, it will proceed to compulsory acquisition of outstanding XCD shares and listed options.
There was also a warning issued to those share and option holders who have not accepted.
If 88 Energy does not reach the 90% compulsory acquisition thresholds, those still holding XCD shares will remain a minority with reduced influence in the running of the business.
“Further, 88 Energy’s controlling position may affect the liquidity of the minority holders,” the statement added. This could increase the difficulty in selling their shares and options at an attractive price.
Takeover will mean a merger of Alaska interests
XCD Energy is active in the North Slope region with 100% ownership of 195,373 acres (79,064ha).
It has a prospective resource of about 1.6 billion barrels. The company also added four additional leases in the December quarter.
88 Energy controls a net 250,000 acres (101,171ha). Its major project is called Icewine and the company is free-carried by London-listed Premier Oil (which has operations in Indonesia, Mexico and offshore Falkland Islands) up to US$23 million ($35.7m).
88 Energy retains a 30% working interest.
In its announcement of the takeover, 88 Energy made the point that a combined company would have an attractive and complementary portfolio of exploration assets.
Its case also noted that a larger entity would have enhanced strategic, commercial, technical and financial strength to optimise financing of operations and exposure to a larger global investor base.