Australia’s Norwest Energy (ASX: NWE) has recommended that shareholders reject Mineral Resources (MinRes) Ltd’s (ASX: MIN) unsolicited $223 million bid to buy the oil and gas explorer.
MinRes, which has iron ore and lithium projects, already owns a 19.9% stake in Norwest but it made an off-market scrip offer last month to acquire the remaining shares.
Norwest said the bid failed to properly recognize the value of the company, which has a stake in the Lockyer project, a major gas discovery in West Australia’s Perth Basin.
“MinRes is seeking to secure control of Norwest and its Perth Basin assets without paying an appropriate premium,” Norwest said in the statement.
“Accepting the offer would reduce shareholder exposure to the Lockyer project … while increasing their exposure to the risks associated with MinRes’ other businesses and commodities.”
The Lockyer project, in September 2021, is seen as a future source of inexpensive gas to power downstream processing in the resources-rich state.
The rejection will likely be a blow to MinRes and its managing director Chris Ellison, who had called the offer a “no-brainer” as it gives Norwest shareholders “a unique opportunity to join our MinRes family and be part of the next chapter in our significant growth”.
Norwest knocking back MinRes’ offer is not the only example of mining companies trying to add gas assets to their portfolios.
Warrego Energy has recommended shareholders to accept Gina Rinehart’s Hancock Prospecting takeover bid, which was sweetened last week after MinRes entered the fray for the Perth Basin gas player.
