Sound Energy PLC (AIM:SOU) has made a move to buy Angus Energy in an attempt to expand and diversify its portfolio.
It comes after Angus earlier this month launched a strategic review to consider putting the company up for sale.
Sound made three advances to Angus - pitched at 1.00p, 1.30p and 1.40p – which were all rejected before the respective companies and their advisors landed on 1.50p per share as a level to consider, with any transaction to be settled in shares.
At 1.50p, it gives Angus an implied value of £21.6mln, based on Sound shares being priced at 2.20p.
Sound shareholders would retain around 62% of the enlarged company which, as part of an energy transition focussed strategy, intends to prioritise the development of gas assets in jurisdictions “where high gas pricing, attractive fiscal terms and a beneficial regulatory environment are supportive to project development”.
Angus holds a portfolio of onshore UK oil and gas assets along with interests in a number of ‘transition and ESG’ ventures focussed on geothermal, waste to energy, hydrogen and carbon capture.
Sound said it is only minded to proceed with an offer on the pre-condition that a recommendation from the Angus Board is forthcoming, and, it added that it looks forward to constructive engagement with Angus.
The company noted that it has received support for the offer representing some 13.92% of Angus Energy’s issued share capital.
It cautioned, meanwhile, that at this stage there can be no certainty that an offer will be made.
Angus shares rose by around 8.5% in Tuesday morning’s deals, changing hands at 1.23p each, Sound Energy shares were priced at 2.15p in the market, down just over 2%.
SP Angel described it as an ‘interesting approach’ with analyst Sam Wahab adding that the offer appears fair. It values Angus at a healthy premium, the analyst added.
“Nevertheless, the proposal now looks to be heading hostile with Angus holding firm, but as ever, it will be the shareholders that will decide the future of this deal,” Wahab said in a note.