- Mineral Resources to acquire all AWE shares via a Scheme of Arrangement
- Recommended unanimously by AWE Board
- Implied value of $0.83 per AWE share if the Mineral Resources VWAP is between $15.00 and $21.00 during the 10 trading days ending on the day prior to the scheme vote
- AWE shareholders to receive $0.415 cash and between 0.0198 and 0.0277 Mineral Resources shares per AWE share
- Premium for AWE shareholders of 63% based on the undisturbed 3-month VWAP for AWE shares

AWE Limited has entered into a binding Scheme Implementation Deed with Mineral Resources Limited. Under the terms of the agreement, Mineral Resources has agreed to acquire all of the shares in AWE via a Scheme of Arrangement (the Scheme).
Each AWE shareholder will receive as default consideration $0.415 paid in cash and between 0.0198 and 0.0277 Mineral Resources shares per AWE share. Shareholders will be provided with the ability to elect to receive 100% cash or 100% scrip, with actual allocation subject to scale back to ensure total transaction consideration paid is 50% cash and 50% scrip.
The number of Mineral Resources shares to be issued to AWE shareholders will be determined by the volume weighted average price (VWAP) for Mineral Resources shares calculated over the 10 trading days ending on the day prior to the Scheme vote. If the Mineral Resources VWAP is between $15.00 and $21.00, the number of Mineral Resources shares per AWE share will be equal to $0.415 divided by the Mineral Resources VWAP (subject to rounding). AWE shareholders will receive the maximum number of 0.0277 Mineral Resources shares per AWE share if the Mineral Resources VWAP is $15.00 or less and receive the minimum number of 0.0198 Mineral Resources shares per AWE share if the Mineral Resources VWAP is $21.00 or more.
Transaction summary
Based on consideration of $0.83 per share, the transaction values AWE at a market capitalisation of $526.0 million. This represents an attractive premium of:
- 52.3% to AWE’s closing price of $0.545 per share on 29 November 2017, being the day prior to the disclosure that China Energy Reserve and Chemical Group Australia (CERCG Australia) had approached AWE with a proposal to acquire the company;
- 51.9% to AWE’s 1-month VWAP of $0.546 per share up to and including 29 November 2017; and
- 63.0% to AWE’s 3-month VWAP of $0.509 per share up to and including 29 November 2017.
If the Scheme is implemented, based on the current trading price of Mineral Resources’ shares, AWE shareholders will own approx. 6.8% of the total issued share capital of the combined group.
The transaction is subject to the approval of AWE shareholders at a shareholder meeting expected to occur in mid April 2018, as well as Court approval and other conditions.
Support from AWE Board
After due consideration, the Directors of AWE concluded that the Mineral Resources proposal was in the best interests of AWE shareholders and unanimously recommend that all AWE shareholders vote in favour of the Scheme, and also advise that they intend to vote the AWE shares which they control in favour of the Scheme, both in the absence of a superior proposal and subject to an independent expert concluding that the Scheme is in the best interests of AWE shareholders.
Commenting on the acquisition, Mr Kenneth Williams, Chairman of AWE said:
'The acquisition price represents a highly attractive opportunity for AWE shareholders to realise a material premium for their AWE shares. Shareholders who receive Mineral Resources shares can choose to remain invested in the larger and more liquid Mineral Resources or they can choose to sell their new Mineral Resources shares for cash'.
Mr David Biggs, CEO and Managing Director of AWE said:
'We are proud of the work we have done to reshape AWE and, in particular, the value which has been created by our Waitsia project. This represents a very good opportunity for shareholders to crystallise compelling value'.
Advisers
AWE has appointed UBS AG, Australia Branch and Highbury Partnership as financial advisers and Allens as legal adviser.
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Source: AWE