UPDATE: Dart Agrees To Buy Apollo; Deal Values Target At A$150 Million
28 September 2010 - 3:41PM
Dow Jones News
Dart Energy Ltd. (DTE.AU) said Tuesday that it could be selling
gas to the New South Wales state domestic power market by 2012
after it unveiled a friendly share-based takeover offer for Apollo
Gas Ltd. (AZO.AU) that gives the target an enterprise value of
about A$145.5 million.
The offer values Apollo's shares on issue at A$71.4 million but
an Apollo spokeswoman said Apollo also has 109.6 million shares
subject to escrow and cash on hand of A$12.0 million.
The acquisition will give Dart its first material interest in an
Australian asset, adding to its undeveloped coal seam gas acreage
in China, India, Vietnam and Indonesia, and follows the company's
spin off from Arrow Energy earlier this year.
Australia's large coal endowment has contributed to its status
as the world's biggest carbon emitter per head of population but
increasing public concern about climate change is strengthening the
investment case for natural gas.
Dart, which already owns 21% of Apollo, is offering three of its
shares for every four Apollo shares, or about 79 Australian cents
per Apollo share, based on their most recent value before the deal
was announced.
Apollo directors and major shareholders representing 54% of the
company's shares on issue intend to accept the offer, Dart
said.
Dart Chief Executive Simon Potter said Apollo's gas fields are
close to existing power generation infrastructure, minimizing
development expenses and helping to make first gas sales possible
by 2012 if planned exploration and appraisal drilling proves
successful.
Dart's parent Arrow and its coal seam gas assets in Queensland
state were bought by Royal Dutch Shell Plc (RDSB.LN) and PetroChina
Co. (PTR) for A$3.44 billion to fuel the pair's proposed liquefied
natural gas plant there.
Potter said Apollo's gas, in the far more immature New South
Wales coal seam gas market, could possibly be fed into a proposed
LNG plant in that state or in Queensland state. "We'd have initial
targets to get gas into power as soon as possible but following on
later, the portfolio offers sufficient optionality for scale to put
gas into a pipeline north," Potter said.
Dart may consider listing its offshore assets separately through
an initial public offering of shares once the Australian business
"reaches critical mass", Potter said, without providing a specific
timeline.
He reiterated that Dart will consider launching an equity
raising within the next 12 months to fund its exploration
program.
-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692;
Ross.Kelly@dowjones.com
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