88 Energy Makes Unsolicited Bid to Acquire Alaskan Explorer XCD Energy
ASX-listed 88 Energy Ltd. has made an unsolicited off-market offer to acquire XCD Energy Ltd., another ASX quoted E&P player which currently holds a 100% working interest in 195,373 acres of highly prospective acreage in Alaska. Both companies are based in Perth and have interests in the oil-rich Alaskan North Slope. 88 Energy argues that move will create a financially stronger Alaskan explorer with greater exposure to global investors.
Under the terms of offer, 88 Energy’s all-stock bid is comprised of 1.67 new 88 Energy shares for every share of XCD share held, plus 0.5 shares for each XCD quoted option, and is valued at approximately A$7.5 million. The offer values XCD shares at A$0.01 each, representing a 100% premium to the company’s closing share price on April 24th. 88 Energy also revealed that it has entered into pre-bid acceptance deeds with major XCD shareholders and listed option holders representing 18.5% of XCD shares and 6.8% of listed options on issue. The completion of the takeover is subject to several closing conditions, including a 90% minimum acceptance by XCD shareholders. If the transaction is completed, XCD security holders will own up to a 15% stake in the combined entity.
According to 88 Energy, other benefits arising from the deal include leveraging from the combined group’s strong exploration and operating expertise, enhanced financial strength and the ability to optimize exploration activity across an enlarged portfolio. The proposed transaction will create an Alaska-focused oil exploration and appraisal company with a diversified portfolio of three highly prospective project areas: Project Icewine, Yukon Leases and Project Peregrine.
Reacting to the unsolicited offer, XCD said in a statement that its board is currently giving careful consideration to the detail of the offer including the conditions. “The XCD Board has not had the opportunity to fully consider the offer and the details of its terms and conditions so make no comment or recommendation on the same,” the company stated.
Longreach Capital is acting as corporate advisor, and Steinepreis Paganin is acting as legal advisor to 88 Energy. GTP Legal is acting as legal counsel to XCD.