Unanimously Recommends Improved Macquarie MPVD Proposal
Unanimously Recommends Improved Macquarie MPVD Proposal
Brisbane, Mar 10, 2017 AEST (ABN Newswire) - The Board of Directors of Central Petroleum Limited (ASX:CTP) (OTCMKTS:CPTLF) ("Central") is pleased to announce it has unanimously recommended an improved proposal from Macquarie MPVD Pty Limited ("Macquarie MPVD"), a subsidiary of Macquarie Group to acquire all shares in Central not already held by Macquarie MPVD or its related bodies corporate by way of a scheme of arrangement ("Scheme") in accordance with the Central Scheme Deed which is attached to this announcement ("CSD")(see the link below).

Macquarie MPVD's revised proposal is to offer for each share in Central cash consideration of $0.20 plus a Contingent Value Note ("CVN"). The value of the CVN will be determined by the success of exploration on Ooraminna retention licences, the Palm Valley Deep prospect, the Mt Kitty discovery and certain exploration licences in the Santos Southern Amadeus Basin joint venture in the 4 years following completion of the Scheme.

The structure of the offer reflects the value added to the producing assets acquired since February 2014, when Central made its pivot to gas production whilst retaining exposure to potential exploration success. The CVN allows shareholders to participate in the exploration assets of the Central portfolio with the potential for near term success, without incurring any of the associated appraisal and/or exploration costs.

The upfront cash consideration of Macquarie MPVD's proposal (excluding the CVNs), represents:

- an increase of 14 per cent on Macquarie MPVD's earlier non-binding proposal of $0.175;

- a premium of 21 per cent to the closing price prior to date of this announcement; and

- a 60 per cent premium to Central's closing share price the day prior to the initial Macquarie proposal.

The Directors believe there is potential for shareholders to realise additional value from the CVNs. The range of potential outcomes is from zero to 19.62 cents per CVN. The Directors can give no assurance as to the ultimate value of the CVNs.

The key terms of the CVNs are set out in Schedule 2 of the CSD.

Central's Chairman Robert Hubbard said the proposal represents attractive value to shareholders at a time when Central requires a major injection of development capital if it is to respond to the opportunity created by the Australia's domestic gas shortage.

"Central has created significant value in its recently acquired operating assets (acquired with $15M in equity and $100M in debt) and this is reflected in the improved Macquarie MPVD offer. In addition through the CVNs, the Central shareholders retain an opportunity to share in future exploration success."

"Central's ability to fully realise the opportunity presented by the east coast gas market shortage will substantially depend on future appraisal and exploration discoveries, since a majority of Central's existing certified Proven (1P) gas reserves are dedicated to current gas sale agreements. Given Central's debt levels, the substantial at risk capital that needs to be invested before certified reserves can be increased would have required shareholders to either contribute most of these funds or suffer a very material dilution."

"The Directors have explored alternative strategic, funding and transaction possibilities and have concluded that the Macquarie MPVD proposal is the most attractive for shareholders, and the Board would be irresponsible to deny shareholders the opportunity of this liquidity event.", Mr Hubbard said.

Central has appointed Ernst & Young Transaction Advisory Services Limited ("EY") as the independent expert to opine on whether the Scheme is in the best interests of shareholders and to provide the independent expert's report ("IER"). EY will be assisted by RISC Operations Pty Ltd ("RISC") as the Independent Technical Specialist. Each Director intends to vote all Central shares held or controlled by them in favour of the Scheme, in the absence of a superior offer.

The CSD contains terms which are customary for a transaction of this nature including "no shop" and "no talk" provisions, a "matching right" for any superior proposal put forward by a third party and a reimbursement fee payable by Central in certain circumstances.

Implementation of the Scheme remains subject to customary conditions including:

- Central shareholders approving the Scheme by the requisite majorities;
- Court approval of the Scheme; and
- no Central Prescribed Occurrence or Central Material Adverse Change or termination of the CSD occurring,

in each case as described in the CSD.

The Scheme Booklet is expected to be sent to Central shareholders in late April 2017. The Scheme Booklet will contain information relating to the proposed transaction, the reasons for the board's unanimous recommendation, details of the shareholder meeting, the IER and the other matters relevant to Central shareholders' vote on the Scheme.

It is anticipated that Central shareholders will have the opportunity to vote on the proposal at a meeting to be held in late May 2017.

Subject to the conditions of the Scheme being satisfied, the Scheme is expected to be implemented in June 2017. An indicative timetable is included in Schedule 1 of the CSD, however this remains subject to change.

Central is being advised by Origin Securities as financial adviser and Jones Day as legal adviser.

To view the Central Scheme Deed, please visit:

About Central Petroleum Limited

Central Petroleum LimitedCentral Petroleum Limited (ASX:CTP) is an oil and gas explorer and producer listed on the Australian Securities Exchange focused on supplying the domestic gas market. Central is advancing several separate projects across what is regarded as the biggest package of proven and prospective oil and gas acreage across central Australia. This spread of assets gives Central multiple options for growth and development. 88% of this land being gas prone has led to the Company's focus on becoming a major domestic gas producer.



Martin Debelle Citadel-MAGNUS
M: +61-409-911-189
T: +61-2-8234-1000

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