Chinese in lightning raid on CSG player MATT CHAMBERS AND BRIDGET CARTER THE AUSTRALIAN APRIL 28, 2014
LITTLE-known private Chinese company Landbridge Group has raided the register of WestSide Corp, blindsiding the board of the Queensland coal-seam gas player by taking out its second-biggest shareholder and securing a 19.9 per cent stake.
In the raid, which has come with a sweetened $178 million bid, Landbridge secured the 11.3 per cent stake of Infrastructure Capital Group, whose managing director and founder John Clarke is on the WestSide board.
Mr Clarke is believed to have been one of the directors most passionate about the company being worth more than the Landbridge bid, but for governance reasons ruled himself out of decisions on the stake, which was owned by ICG’s $1 billion Energy Infrastructure Trust.
Landbridge is making mileage from the purchase, trumpeting Mr Clarke’s ICG position on Thursday night.
It also raised the bid from 36c to 40c and dropped many conditions from its previous “intention to bid” issued on March 10, including having to conduct due diligence.
The board of Brisbane-based WestSide will meet tomorrow to consider the offer.
The WestSide board had been dismissive of Landbridge’s first offer, believing the bid would not gain traction because a deal to supply the Santos-led Gladstone LNG plant was about to be signed that would revalue the company.
But the gas deal, revealed on March 27, did not lead to a share price jump. Instead it led two top 10 shareholders — former chairman and founder Angus Karroll and Queensland’s wealthy Mitchell family — to quickly sell their stakes to Landbridge at the bid price.
But the real coup for Landbridge was buying the 11.9 per cent stake of the ICG-managed Energy Infrastructure Trust, a purchase that means the Landbridge stake eclipses the 17.6 per cent stake of New Hope and makes the Chinese predator the biggest shareholder.
Mr Clarke could not be contacted yesterday and it is not known if he plans to remain on the WestSide board.
ICG chief investment officer Andrew Pickering confirmed Mr Clarke had no involvement in the decision to sell, which was made by EIT’s independent trustee board.
“WCL is not a core investment for EIT and EIT’s board was pleased with the price received for its WCL shares,” Mr Pickering said.
Landbridge, controlled by Chinese billionaire Ye Cheng, is little known in Australia and believed to have never operated an oil and gas asset.
The WestSide board and shareholders will be hoping the threat of Landbridge taking control of the company’s Meridian project near Moura will inspire Santos (which has contracted Meridian’s gas for GLNG) or 49 per cent Meridian shareholder Mitsui to enter a bidding war.
Westside chief executive Mike Hughes said the board would now meet to consider the offer.
“We will review the bid and agree a way forward,” he said.
It is understood that the company, advised by Highbury Partnership, intends to hold a board meeting tomorrow.
Landbridge is a privately held group based in Shandong Province, with its main business in ports and logistics, petroleum refinement and real estate.
WCL Price at posting:
33.0¢ Sentiment: Buy Disclosure: Held
