Eureka Energy board recommends Aurora takeover
Eureka Energy's board has recommended a takeover proposal from Aurora Oil & Gas.
Eureka Energy's board of directors has recommended shareholders accept a takeover offer made by Aurora Oil & Gas, despite believing the bid undervalues the company.
Aurora submitted an offer price of $0.45 (£0.28) per share to take control of Eureka shares and was adamant that this was a final offer that could not be increased through negotiations by merger and acquisition advisors from the two parties.
Eureka's board said that while it unanimously believes the company is undervalued, shareholders should accept the proposal because failing to do so could have an adverse affect on Eureka's share price after the offer period ends.
It also noted Aurora already holds a "substantial" 33 per cent of Eureka thanks to the level of acceptances of the offer and said there could be "potential implications" of Aurora acquiring a minority ownership of the firm.
Eureka had previously been the subject of a merger proposal from Lonestar Resources, but a breakdown in negotiations resulted in Lonestar withdrawing its purchase proposal.
Posted by David Gleck
Source: Eureka Energy press release, June 13th