Armour rejects WestSide hostile takeover

Armour Energy directors have pleaded with shareholders to reject a hostile takeover bid launched by WestSide Corporation, a Brisbane-based gas producer.

A statement issued to the ASX today urges shareholders to reject the WestSide offer, labelling it is “opportunistic and inadequate”.

Armour Energy’s board has reportedly unanimously refused the offer.

“Having reviewed the terms of the offer, the board of Armour unanimously recommends that shareholders REJECT the opportunistic and inadequate WestSide offer as it significantly undervalues the company both in terms of its existing assets and the potential value the company expects to deliver to its shareholders in the near term,” the statement said.

Armour shareholders have been told to ignore any documentation WestSide sends in relation to the hostile takeover.

Announced 31 August, WestSide proposed an unsolisited takeover bid of Armour Energy comprising of a $0.12 per share offer.

The WestSide requested the bidder hold 50.01 per cent interest in Armour shares and demanded that Armour not continue with a $100 million farm-out deal at its McArthur Basin oil and gas exploration project with American Energy Partners.

Armour stocks jumped more than 105 per cent in the wake of the 31 August announcement to $0.14 per share.

“Armour is on the verge of undertaking two value enhancing transactions, which the board believes are key to unlocking the potential which exists in Armour’s asset base and Armour’s position in the Australian gas market,” today’s statement read.

Armour Energy on 2 September also announced it had entered into an agreement to purchase Origin Energy’s Roma Shelf assets for some for $A10 million cash plus $A3 million in deferred consideration.

“The offer does not reflect the current or potential value of Armour’s assets and comes at a time when the company is in the process of decisively rebuilding its business and in the context of increasing demand for gas in Australia,” Armour executive chairman Nicholas Mather said.

In his initial statement to the ASX, WestSide CEO Mike Hughes said the offer was a “significant” premium.

“Armour shareholders will have a clear choice to either accept the WestSide offer and receive certain value or continue to be exposed to the risks associated with Armour in these volatile and uncertain times,” he said.

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