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- Embattled oil and gas business FAR Limited (FAR) receives a takeover offer from investment firm Samuel Terry as company shares continue to slip
- Samuel Terry says it plans to offer 45 cents per share for at least 50.1 per cent of FAR, representing a 23.3 per cent premium on FAR’s last closing price of 36.5 cents
- FAR shares have lost over 96 per cent of their value in less than four years as the company’s exploration efforts in offshore Senegal continue to prove unsuccessful
- FAR says the Samuel Terry offer recognises that company shares are currently undervalued, but shareholders should take no action until further notice
- Shares in FAR spiked to above the proposed offer price this morning, up 24.66 per cent to 46 cents each just before midday AEDT
Embattled oil and gas business FAR Limited (FAR) has copped a takeover offer from investment firm Samuel Terry Asset Management as company shares continue to slip.
While the offer has not yet been officially launched, Samuel Terry this morning announced its intention to bid 45 cents per share for at least 50.1 per cent of FAR.
This offer price represents a 23.3 per cent premium on FAR’s last closing price of 36.5 cents and an 18.8 per cent premium on FAR’s one-month volume-weighted average price.
“The offer provides investors with an opportunity to divest as much of their shareholding in FAR as deemed appropriate, in an orderly manner and without the need to pay brokerage fees, and with the opportunity to receive certain value,” Samuel Terry said in a statement as it urged FAR shareholders to vote in favour of the deal.
The takeover, if accepted, would mark a somewhat bleak moment for FAR, which was trading for over $13 less than four years ago.
A string of exploration failures
FAR shares first tumbled from $13.50 to around $6 between November 2018 and January 2019 after the company reported that its prospective Samo-1 well in offshore Senegal was unsuccessful.
Over the next several years, FAR’s exploration wells continued to under-deliver, with shares trading for around $1.50 in September 2021. Shareholders were clinging to the Bambo-1 well, near the failed Samo-1 well, as a shred of hope in the FAR story.
Alas, when FAR completed the well in December and investors were disappointed yet again, shares tanked once more to sit below 40 cents each.
FAR: “Take no action” on takeover bid
Following the announcement of Samuel Terry’s planned bid, FAR has told shareholders to take no action as it considers the offer.
The company said it had appointed legal advisors to help evaluate the proposal.
“The takeover bid recognises that FAR’s shares are undervalued having regard to cash backing and the potential of FAR receiving a US$55 million [A$78.6 million] contingent payment from the sale of its interest in the RSSD project, as well as its existing oil and gas interests,” FAR management said.
Samuel Terry’s offer will need to be accepted by 50.1 per cent of FAR shareholders in order to move forward. The investment firm already holds a 4.9 per cent interest in FAR.
The takeover offer formally opens on February 14 and is slated to close on March 14.
Shares in FAR spiked to above the proposed offer price this morning, up 24.66 per cent to 46 cents each just before midday AEDT.
