Lukoil jumps in with takeover offer for FAR

Following a failed attempt to enter into the RSSD project located offshore Senegal through the acquisition of stake from Cairn Energy, Russia’s Lukoil has now made a takeover offer to another partner in the project, Australia’s FAR Limited.

In a statement on the 17^th February, FAR Limited said it had received a conditional non-binding indicative proposal from PJSC Lukoil, one of the world’s largest publicly traded energy companies, to acquire 100 per cent of the shares of FAR at A2.2c cash per share.

The Russia-based Lukoil and its proposal values FAR at A$220 million (US$171 million).

FAR cautioned that the Lukoil Proposal is not a legally binding offer, it is subject to targeted and timely corporate due diligence on FAR, it is subject to final Lukoil board approval, and that there is no certainty that the Lukoil Proposal will necessarily eventuate.

Lukoil has stated that the price proposed by it represents a higher value for FAR shareholders than both the proposed sale of the RSSD project to Woodside and the incomplete proposal from Remus Horizons.

FAR has not received a binding offer from Remus. Namely, FAR has already had a conditional non-binding indicative proposal from Remus Horizons to engage in further discussions and further investigations for the purpose of evaluating its capacity to make an offer or announce an intention to make an offer to acquire 100 per cent of the shares of FAR at 2.1c cash per share.

Remus’ offer was conditional on the FAR shareholder meeting to consider approving the sale of the RSSD project scheduled for the 21^st December 2020 being rescheduled. The Remus Proposal was also conditional on the Woodside sale not occurring.

The meeting was first rescheduled from December 2020 to the 21^st January 2021 but it was rescheduled again in January, this time for the 18^th February 2021, to consider Remus’ takeover proposal.

Meanwhile, on the 20^th January FAR executed a sale and purchase agreement with Woodside in relation to the Senegal sale.

FAR’s shareholders were also due to consider authorising the agreement with Woodside at the shareholders’ meeting to be held on the 18^th February.

However, FAR has not accounted for the Lukoil proposal coming in, which means that the shareholders’ meeting will be rescheduled again.

Lukoil has stated that its proposal will be funded from available internal cash reserves and that any formal binding offer would not include any financing conditions.

Lukoil proposal is conditional (amongst other things) on the FAR shareholder meeting to consider approving the sale of the RSSD project to Woodside scheduled for Thursday, the 18^th February 2021 being rescheduled.

It is also conditional on obtaining minimum acceptances of 50.1 per cent of shares and a FAR board recommendation.

Lukoil has stated that it does not believe it requires FIRB approval for the transaction and that it does not anticipate requiring any other regulatory approvals as a condition of the transaction.

Lukoil has also stated that it has a deep understanding of the RSSD Project as it has previously completed due diligence and entered into an agreement to acquire an interest in the RSSD Project from Cairn Energy, which was subsequently pre-empted by Woodside.

Source: Offshore Energy Today