Aurora slaps new, reduced Molopo bid on the table

In yet another twist to the takeover saga for Molopo Energy, its shareholder Aurora Funds Management has made a revised takeover bid for the oil and gas play valuing Molopo’s shares at a 25 per cent discount to its previous offer.

Aurora (ASX: ABW), which currently holds around 2 per cent of Molopo, has made a new revised takeover bid for all the ordinary shares in Molopo at 13.5c each, a 3.5c per share drop on its previous takeover bid in July which valued Molopo at 18c per share.

In a statement released after market close, Aurora said the price had been reduced to reflect the estimated value dilutive impact of Molopo’s recent $8.75 million acquisition of 50 per cent of US company Orient FRC and recently reported half year operating loss of $2.7 million.

The Orient deal, announced in August, saw Molopo take a 50 per cent working (earn-in) interest in an exploration and development oil and gas lease prospect in South Florida, USA.

“The price has been decreased, but only by the amount of the estimated dilution to the value of a Molopo share due to the Transaction and operating loss, as calculated by Aurora,” the company said.

“The new bid will otherwise be made on the same key terms as the withdrawn bid.”

Aurora’s original bid in July was subject to defeating conditions including a “no material transactions” condition that between 27 July 2017 and the close of the offer, Molopo not announce or make any investment of more than $2 million.

Molopo’s $8.75 million Orient deal triggered the no material transactions defeating conditions and as a result Aurora today withdrew its original bid.

Aurora said it sought further information from Molopo to assess its impact on the bid but to date Molopo hasn’t provided any further information.

“As a result of Molopo’s failure to provide the market with any further information, Aurora is unable to assess the impact of the transaction on its bid,” the company said.

“Based on the limited information currently available to it, Aurora considers the transaction will likely be significantly value dilutive to Molopo. According to Aurora’s calculations, that value dilution is in the order of $0.035 per Molopo share. “

However, Aurora noted that it would consider any further information provided by Molopo to see if some value can be attributed to the Orient transaction and, if it can, would take that into account when finalising the bid price and other offer terms for the new bid.

The new bid price represents a 3.6c per cent discount to the closing sale price of Molopo shares on 21 July, the last day Molopo shares traded on ASX before entering a trading halt.

Aurora said the new bid still provided an attractive alternative to the current uncertainty and lack of strategic direction at Molopo and provides shareholders with an opportunity to realise their investment in the company.

Unless extended, the offer period will close in mid-January 2018.

Today’s news comes after Keybridge Capital (ASX:KBC), which holds 18.5 per cent stake in Molopo, announced yesterday that it had begun legal action in the Western Australian Supreme Court against the company seeking orders to inspect specific company documents relating to the Orient transaction.

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