Australian Oil and Gas recommended shareholders accept a takeover offer by Ensign Resource Service Group. Ensign increased its offer for AOG on Monday to A$2.60 cash from A$2.30 for each AOG share and to A$1.40 from A$1.10 for each AOG option, topping two rival bids. "The Ensign offer prices are now within (and potentially above) the valuation range considered by the Independent Expert to be fair and reasonable," AOG said in a statement.
Shares in AOG, which operates 23 drilling rigs and five service units, last traded at A$2.69 on Wednesday, capitalizing the group at A$156 million ($89 million). If Ensign obtains more than 50 percent of AOG's shares before the closing date of July 11 then it will increase its offer again to A$2.70 per share and A$1.50 per option, valuing the company at A$175 million (US$ 99 million). Ensign currently has a 45.99 percent stake in AOG after acquiring PICO Holdings Inc.'s23.1 percent interest and Downer EDI Ltd's 6.8 percent share in recent days.