Gina Rinehart muscles out Kerry Stokes in battle for gas group

Warrego’s shareholders have seen their investment rise nearly 40 per cent or $100 million since they were first courted less than a month ago when Strike Energy revealed an all-scrip offer with an implied price of about 19¢ a share.

Rinehart then popped into the Warrego fray with a near $18 billion investment war chest, but her control of the gas minnow will be complicated by Strike increasing its shareholding and voting power on Wednesday to 19.9 per cent, becoming Warrego’s largest shareholder.

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Strike negotiated a one-for-one swap with various Warrego shareholders over its own shares and said it had increased its direct and indirect ownership of the key gas field to about 60 per cent.

“For the avoidance of doubt, Strike’s board has not formed any intention with regards to any future transaction that may involve Warrego, and Strike is currently considering all available strategic options,” it said.

Strike’s boss Stuart Nicholls said the company has a strong track record of identifying and securing valuable and strategic energy assets. “The expansion of our ownership of Warrego shares and the resulting look through to an increased economic interest in the West Erregulla gas field is a further demonstration of this,” Nicholls said.

Credit Suisse analyst Saul Kavonic said Strike’s shareholding increased the possibility of a standoff with Hancock. “Hancock’s offer is unconditional. It could end up with a majority, but Strike holds a blocking stake,” Kavonic said.

The bidding battle between billionaires Rinehart and Stokes is just the “opening shot,” he said. “We believe this is only the beginning of the Perth basin’s consolidation. We expect further mergers and acquisitions next year, including the possibility of Strike becoming a target itself.”

Baring another last-minute bid, Hancock is now set to take over a promising gas field that can quickly be brought into production without controversial hydraulic fracturing to supply a market that is expected to tighten after decades of relatively low prices due to enforced supply from WA’s huge gas export projects.

Warrego shares were trading down 2.62 per cent at 30¢ on Friday.