AWE rejects takeover offer

A low-ball bid for AWE highlights what we have long advocated: AWE is cheap. Gaurav Sodhi restates the case.

Cooper Basin energy producer Senex Energy has made and withdrawn a takeover bid for maligned larger peer AWE, after rejection by the latter's board. The offer was 1.9 shares for every share in AWE, valuing the company at $1.44 per share, a 20% premium to the pre-offer price of $1.19, but well below our estimate of fair value.

Senex shareholders would have owned 53% of the equity in the new entity, with AWE shareholders holding the remainder. Although pitched as a merger of equals, the proposal was a thinly veiled takeover attempt.

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