Ellison Sees “No Brainer” in MinRes Taking Over Norwest

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In his ambitious mission to persuade Norwest Energy shareholders to accept the $403 million takeover offer, billionaire Chris Ellison is facing the challenge of potentially raising the stakes to win over the target’s board.

On Tuesday, Mr Chris Ellison’s Mineral Resources commenced their takeover proposal in the latest skirmish of the contest for dominance over onshore gas resources within the Perth Basin.

The founder and managing director of MinRes declared it a “no-brainer” decision for Norwest shareholders to accept the all-script offer announced on December 16.

Despite the Norwest board still deciding on the offer, they have suggested that they seek more than what is currently being offered. This demand comes from an increasingly competitive bidding war for Warrego Energy, another gas play in Perth Basin that has now been three months long.

On Tuesday, Mr Ellison asserted that the MinRes offer would allow Norwest shareholders to be part of a flourishing new venture by joining the more prominent MinRes family. This is an opportunity for them to become part of something bigger and watch it grow.

The former MinRes executive declared that prior scrip-based takeover offers had been an excellent success for shareholders, yielding returns of over 25% per annum in the last ten years.

“Those who turned down similar offers have made a costly mistake,” he said.

Before tendering their takeover offer for the minority joint venture partner in the Lockyer Deep project of Perth Basin, MinRes held a 19.9 per cent equity stake in Norwest’s shares.

Mr Ellison views Lockyer Deep as an obtainable source of cost-efficient gas to energise downstream processing in the resource-abundant state of Western Australia.

MinRes rewards Norwest shareholders, including Gina Rinehart’s Hancock Prospecting, with one share of MinRes in exchange for every 1367 shares held by the Norwest company.

On December 16, the MinRes share price closed at a staggering $81.22 and even announced a 6¢-a-share scrip offer for Norwest products; however, it has since dropped to an all-time low of $75.11!

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