CHINESE firm Landbridge Group has moved closer to succeeding in its $178 million takeover bid for WestSide Corporation after the Queensland coal seam gas producer’s directors reluctantly recommended shareholders give the deal their blessing.
WestSide had stood firm in its opposition of the hostile takeover approach from Landbridge due to the belief it failed to adequately recognise the full value for shareholders from the GLNG gas sales agreement and other assets owned by the company.
WestSide had worked hard to solicit alternative interest in WesSide following Landbridge’s approach in March, however no attractive proposals were put on the table.
WestSide was left with little choice but to change its tune on the takeover offer when in early July its major shareholder, New Hope Corporation, sold about 12 per cent of its stake which in turn enabled Landbridge to take a 31% holding in WestSide.
WestSide advised that if Landbridge was to acquire a majority interest, but not all of the WestSide shares, the number of WestSide shares traded on the ASX in the future could be significantly reduced which would potentially lessen the value of the shareholding of those WestSide investors who didn’t accept the offer.
“WestSide shares could become illiquid and infrequently traded and, as such, the ASX market price may no longer be a reliable indicator of value,” the company said.
“Having regard to all of these matters, WestSide’s directors have accordingly, and reluctantly, unanimously determined to recommend to remaining shareholders that they accept Landbridge’s offer.”
By 16 July, Landbridge had secured a controlling 52.9% stake in WestSide.
The takeover has been declared unconditional with the offer price of 40c per WestSide remaining unchanged.
The offer closes on 5 August.
WestSide’s flagship asset is its 51% stake in the Meridian gas field at Moura, 160 kilometres west of Gladstone in the Bowen basin. The remaining interest in the joint venture belongs to Mitsui E&P Australia.
In March, the Meridian JV executed a 20-year gas sales agreement to supply 65 terajoules of gas per day to GLNG from 2015.