Cue Energy Resources Ltd (ASX: CUE) has made a brief reply to its shareholders about a takeover bid lobbed by Horizon Oil Ltd (ASX: HZN), basically telling them to sit tight for the moment.
Horizon on Monday launched a takeover bid for Cue, offering 0.8 cents in cash and 0.5625 Horizon shares for each Cue share under the deal, which Horizon said came to an implied value of 14.3 cents for each Cue share.
Cue shares came out of a trading halt this morning, and jumped more than 9% to be changing hands for 14.2 cents.
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No decision as yet
The company's board also put out a statement about the takeover offer, which didn't shed much light on whether they thought the proposed deal was fair or not.
The Cue release to the market on Wednesday morning simply said that the board was considering the offer and that shareholders did not have to do anything at this point.
The Cue Board added:
The Cue board has appointed an Independent Board Committee (IBC), consisting of its current independent directors, Peter Hood AO, Greg Bishop and Ric Malcolm, to evaluate and respond to the Horizon takeover offer. The IBC, together with its independent advisers, is currently assessing the proposed offer and will keep shareholders informed as appropriate.
Deal to provide scale
Horizon Chairman Bruce Clement said in a statement when the bid was launched that the tie-up of the two companies made sense.
The Horizon board believes that, if Horizon acquires 100% of the Cue shares on issue, potential synergies will be available to the combined group, including from the consolidation of overlapping joint venture interests and more efficient joint venture management. The combination of Horizon and Cue, if Horizon acquires 100% of Cue shares, may unlock up to $2 million of annualised synergies. Horizon expects that the majority of these cost synergies, if realised, would be progressively achieved over approximately 12-18 months following successful offer completion.
Mr Clement said the companies had a long-standing relationship, having been joint venture partners in the Maari field for more than 20 years, "and more recently through Horizon's 2024 acquisition of a 25% interest in the Mereenie field in Australia, in which Cue holds a 7.5% interest".
He added that if the companies came together it would create an ASX oil and gas company with nine producing assets across five countries in Southeast Asia and Australia.
Horizon shares were 3.8% lower at 25.5 cents on Wednesday morning.
