French independent Maurel & Prom has struck a £62 million ($75.8 million) deal to acquire UK-listed Wentworth Resources after having an initial offer rebuffed in September.
The two companies — partners in the Mnazi Bay gas field onshore Tanzania — said on Monday that they have reached agreement on the terms of a recommended acquisition of the entire issued and to be issued share capital of Wentworth by M&P.
The planned deal would see Wentworth shareholders receiving 32.5 pence for each share, valuing the entire issued and to be issued ordinary share capital at about £61.7 million.
This offer represents a premium of about 30% on Wentworth’s closing share price of 25 pence on 2 December.
Adjusting for Wentworth’s existing cash of about $30.2 million as at 1 November 2022, the acquisition values the company’s business and non-cash net assets at about £37.1 million.
This planned acquisition “represents a material increase” to the initial indicative offer price proposed by M&P on 23 September this year, the French company said.
On news of the deal, Wentworth’s shares were trading 22% higher at 30.5 pence in London this morning, while M&P share price was up just over 1% at €4.07 ($4.29).
Wentworth’s sole non-cash asset is its 31.94% interest in the Mnazi Bay gas asset which is operated by M&P.
The offer has the support of Wentworth directors and the backing of about 22% of the London-listed player’s other shareholders.
The deal is subject to approval of shareholders, the Tanzania government and the waiver of any right of first refusal or pre-emption right of state-owned Tanzania Petroleum Development Corporation.
Commenting on the agreement, M&P chief executive Olivier de Langavant said: “As the operator of the Mnazi Bay gas field, increasing our stake through the acquisition of Wentworth is a logical step and reflects our stated strategy of maximising value from existing assets.
“Mnazi Bay is an important project to M&P and we look forward to ensuring it continues to make a positive impact, helping Tanzania meet its increasing energy demands and enabling local development.
Wentworth chairman Tim Bushell said the board “is pleased to recommend the acquisition by M&P which represents a substantial premium to Wentworth’s prevailing share price and offers an opportunity for our shareholders to realise this value in the near term for cash”.