Page 9 - AsianOil Week 05 2022

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West-Africa focused

FAR Ltd attracts

another takeover bid

INVESTMENT FAR Ltd, an Australian company focused on
upstream projects in West Africa, reported on
January 31 that it had received a takeover bid
from the boutique investment management
firm Samuel Terry Asset Management, acting as
trustee for Samuel Terry Absolute Return Active
Fund.
In a statement, FAR said that Samuel
Terry had offered to pay in cash at a rate of
AUD0.45 ($0.32) per share, which would put
the total value of the company at AUD45mn
($31.79mn). It also said that the offer had
been contingent on the sale of at least 50.1% of
FAR’s equity to the investment management
firm.
Samuel Terry is already a minority share-
holder in FAR, holding 4.9% of the latter com-
pany’s equity.
FAR went on to say that the offer was not yet
officially open and was not slated to close any dropped by about 50% after that announcement.
earlier than mid-March, meaning that its share- Simon Mawhinney, portfolio manager at the
holders did not need to take any action yet. It Allan Gray Australia investment management
stated that it intended to consider the offer and fund, told the Australian Financial Review on
had appointed the Baker Mackenzie law firm as January 31 that he saw the takeover offer as
its legal advisor in this matter. “very sensible” in light of the failure to find oil
The company said that Samuel Terry’s takeo- at Block A2.
ver bid had been motivated by recognition that “I think Samuel Terry owning FAR is likely to
FAR’s shares are undervalued, “having regard to crystallise a lot more value from FAR than FAR
cash backing and the potential of FAR receiving continuing to sink money into wildcat wells
a $55mn contingent payment from the sale of its with little prospect for success,” he commented.
interest in the RSSD project, as well as its exist- “You could see how this being owned by some-
Allan Gray ing oil and gas interests.” one else is likely to be a fruitful investment.”
Allan Gray Australia had previously held a
(It was referring to the company’s status as a
Australia had former shareholder in RSSD, the consortium minority stake in FAR. However, it sold off its
previously held a set up to explore and develop the Sangomar shares in early December, saying it was con-
oil-bearing block offshore Senegal. FAR sold its cerned about the upstream operator’s push
minority stake in stake in the group to Woodside Energy, another to keep investing in high-risk exploration
Australian company, last year and is slated to operations.
However, FAR managing director Cath Nor-
FAR. receive contingent payments from the project man took a different view, saying that the offer
in the future.)
from Samuel Terry was “cheeky” because it had
The Gambian factor? undervalued her company. “It’s very oppor-
Other observers have pointed out, though, that tunistic, and it’s not going to fly at this share
Samuel Terry may have been spurred to action price, clearly,” she told The Australian Financial
by FAR’s recent failure to discover oil in a wildcat Review.
well drilled offshore the Gambia. This is not the first time FAR has attracted a
The investment management firm began takeover bid. Remus Horizons, a petroleum-fo-
building up its stake in the upstream operator on cused subsidiary of Hong Kong-based Remus
December 24, 2021, one day after FAR revealed Corp., said in December 2020 that it was will-
that it had not found any oil in Bambo-1ST1, a ing to pay AUD209.6mn ($148.1mn) for 100%
sidetrack drilled alongside the Bambo-1 well at of equity in FAR, provided that the company
the northern edge of Block 2, just south of the retained its stake in RSSD. That offer fell through
Sangomar block on the Gambian side of the several months later, and Woodside eventually
maritime border. The company’s share price bought FAR’s stake in Sangomar.™

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