Macquarie MPVD Pty Limited’s acquisition of Brisbane-based Central Petroleum Limited

The Board of Directors of Central Petroleum Limited to announce it has unanimously recommended an improved proposal from Macquarie MPVD Pty Limited, 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 in accordance with the Central Scheme Deed which is attached to this announcement.

Macquarie MPVD’s revised proposal is to offer for each share in Central cash consideration of $0.20 plus a Contingent Value Note1 (“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.

The Scheme Booklet is expected to be sent to Central shareholders in late April 2017.

Central is being advised by Origin Securities as financial adviser and Jones Day as legal adviser with a team led by Brett Heading.

Involved fees earner: Brett Heading – Jones Day;

Law Firms: Jones Day;

Clients: Central Petroleum Limited;

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Author: Michael Patrini