Australian miner trumps oil and gas bid by the new state-backed owner of Hong Kong’s The Centre

Mineral Resources launches a rival bid equivalent to A$0.8 for each AWE share, outbidding China Energy Reserve & Chemicals’ revised A$0.73

PUBLISHED : Monday, 11 December, 2017, 1:26pm
UPDATED : Monday, 11 December, 2017, 8:43pm

A bid for an Australian oil and gas firm by state-backed China Energy Reserve & Chemicals Group, the lead investor of a consortium buying a 75 per cent stake of one of tycoon Li Ka-shing’s Hong Kong crown jewel assets for US$5.12 billion, has been trumped.

A bidding war has emerged for Sydney-based oil and gas explorer AWE after Perth-based Mineral Resources made an all-share takeover offer, challenging an increased all-cash bid by China Energy.

Beijing-based China Energy, an oil and gas trading and logistics firm, late last month made an “unsolicited, non-binding” offer to buy all of AWE at A$0.71 per share.

The all-cash offer was revised up to A$0.73 last week, valuing AWE at A$463 million (US$348 million).

Mineral Resources, which mines lithium and iron ore, launched on Monday a rival bid for every 22.3 AWE shares to be exchanged into one of its shares, equivalent to A$0.8 per AWE share.

Mineral Resources said in a statement that it did not intend to export the gas as it is committed to the domestic market.

AWE, which has rejected two other takeover offers in the past four years, holds a half stake in the Waitsia field in Western Australia, which it said is the largest onshore conventional gas discovery in the nation in the past 40 years and could supply up to about 10 per cent of the state’s domestic needs.

It also owns assets in New Zealand and Indonesia.

It is not immediately clear whether China Energy intends to ship AWE’s gas to China.

China’s state oil and gas giants have been seeking to buy control over overseas gas reserves to enhance supply security of the cleaner burning fuel, which is in high demand and short supply after Beijing declared a “war on air pollution”.

China Energy’s bid is subject to approval by Canberra’s Foreign Investment Review Board.

China Energy is 28 per cent-owned by a unit of the nation’s largest oil and gas producer China National Petroleum Corp. The rest is owned by a trade promotion unit of the Beijing Municipal Commission of Commerce, state-owned China Overseas Holding Group, and China Economic Cooperation Centre, an international economic cooperation agency under China’s Communist Party Central Committee.

China Energy owns 55 per cent of the consortium that agreed pay HK$40 billion (US$5.12 billion) to Li’s CK Asset for the majority stake in The Centre, Hong Kong’s fifth tallest building.

AWE’s board said it will evaluate the two bids and make a recommendation to shareholders “in due course”.