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BUSINESSDESK: L&M Energy chairman Geoff Loudon has made a full takeover bid for the Wellington-based oil and gas explorer at a 45% premium to its last trading price.
Mr Loudon, via his newly incorporated New Dawn Energy, is offering 6 Australian cents a share to take full control of L&M, valuing the company at $A45.3 million. New Dawn has entered into lock-up arrangements securing almost 72% acceptances and will only declare the deal unconditional if it can take full ownership of the energy explorer.
"The background to the offer is that L&M Energy will shortly need more capital," Mr Loudon says. "The offer will provide shareholders the opportunity to sell their shares in L&M Energy at a significant premium to the current share price rather than face the possibility of investing further or accepting a heavy dilution of their shareholdings."
L&M holds coal seam gas exploration permits in the South Island, petroleum exploration permits in the Taranaki basin, coal prospecting permits in the North Island and shale gas exploration permits in Southland.
Mr Loudon provided an $A5 million bridging loan to the energy company in June, and those fund are expected to be used up by the end of the first quarter next year.
If New Dawn is successful in its takeover it will delist L&M from the ASX and NZX continue to run the operation much as it has been, it says in the takeover offer.
Fellow director Greg Hogan has joined Loudon's new venture and neither will participate in L&M's assessment of the offer.
L&M has appointed Adelaide Equity Partners as corporate adviser and Kensington Swan and Piper Alderman as legal advisers to assess the offer.
The dual-listed shares last traded 4.2 Australian cents on the ASX and 5.4 cents on the NZX.