An Australian offshore oil and gas producer, Cue Energy, has responded to a takeover offer from compatriot company Horizon Oil. Horizon announced its offer, which proposes a consideration of A$0.008 in cash and 0.5625 Horizon shares for each Cue share, implying a value of approximately A$0.143 per share. At the time of the announcement, Cue's shares were trading around A$0.1375.

Independent Committee and Shareholder Guidance

Cue has established an independent board committee, comprising independent directors Peter Hood, Greg Bishop, and Ric Malcolm, to evaluate and respond to the offer. The company has advised its shareholders to take no action at this stage. The committee will outline its views in a target's statement to be sent to all shareholders. The offer, once dispatched, must remain open for at least one month.

Rationale and Shareholder Support

Horizon's rationale for the offer is to combine the two similar companies to create a larger ASX-listed entity focused on Southeast Asia and Australasia, with an expanded portfolio. Cue's major shareholder, Echelon Resources, has agreed to sell a 19.99% interest of its 49.97% shareholding to Horizon at A$0.115 per share and plans to accept the takeover offer for the remainder of its holding 21 days after the offer opens, barring a superior proposal.

Existing Relationship and Strategic Fit

Horizon Chairman Bruce Clement highlighted the companies' long-standing relationship as joint venture partners in the Maari field for over 20 years and, more recently, through Horizon's 2024 acquisition of an interest in the Mereenie field, where Cue also holds a stake. Horizon considers the proposal logical due to common assets, geographical focus, and strategies. A successful offer would merge the two entities into a producer with nine producing assets across five countries. Cue operates in Indonesia, New Zealand, and Australia, while Horizon operates in China, New Zealand, Australia, and Thailand.