The company advised the Australian Securities Exchange yesterday that it had scheduled an extraordinary general meeting for May 27 to seek shareholder approval of the proposed acquisition of ARP TriEnergy, which owns the Leigh Creek energy project (LCEP).
“Your independent directors unanimously recommend that you vote in favour of the transaction,” the company said yesterday in the ASX statement. “The independent expert has concluded that the transaction is fair and reasonable”
The deal will see Marathon acquire 100% of ARP TriEnergy’s issued capital in return for issuing 138,311,683 consolidation shares to the vendors in proportion to their holdings in ARP.
Marathon announced on January 7 it had entered into a binding term sheet to acquire all the issued capital of ARP TriEnergy, before entering into a binding share sale agreement on March 3 with ARP TriEnergy and each of the vendors to acquire its shares.
On April 9, Marathon also entered into an interim funding agreement with ARP TriEnergy to provide ARP with funding for working capital and to facilitate the conduct of the planed preliminary appraisal drilling program on the LCEP in the short-term while the broader transaction with Marathon was consummated.
Marathon has been investigating potential targets for acquisition since 2012, assessing some 300 potential projects, predominantly in the minerals and energy sectors, and ARP TriEnergy, which was issued petroleum exploration license 650 in November last year on which the LCEP is situated, fit the bill.
The LCEP aims to produce synthetic natural gas via in situ gasification (ISG) for sale to major gas users on Australia’s east coast, which is facing an imminent gas shortage, and as feedstock for power generation and fertiliser and explosives production.
ARP TriEnergy also applied for seven exploration licenses in South Australia for both petroleum and coal.
