Illustration of Sangomar project where FAR has interest

Russia’s Lukoil gives up on FAR takeover plans

Russia’s Lukoil will not be proceeding with its previous plans to take over Australia’s FAR Limited and enter the Woodside-operated Sangomar project located offshore Senegal.

Illustration of Sangomar project where FAR has interest; Photo source: Woodside

FAR Limited had received a conditional non-binding indicative proposal from Lukoil to acquire the shares of FAR at 2.2c cash per share in February 2021 following a failed attempt to enter into the RSSD project located offshore Senegal through the acquisition of stake from Cairn Energy.

The Russia-based Lukoil and its proposal valued FAR at A$220 million (around $167.4 million).

Lukoil’s previous attempt to enter the project in Senegal through Cairn was pre-empted by Woodside in August 2020.

FAR had cautioned about the Lukoil proposal due to several reasons.

The proposal was not a legally binding offer and it was subject to targeted and timely corporate due diligence on FAR.

It was also subject to final Lukoil board approval and there was no certainty that the Lukoil proposal would necessarily eventuate.

Accordingly, care needed to be used in assessing the Lukoil proposal, the Australian company said.

In a statement on Thursday, FAR said it has been advised by Lukoil that its proposal is not proceeding to a legally binding offer.

FAR has already convened a shareholders meeting on 15 April 2021 following several delays to assess the potential takeover offers.

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At the meeting, the shareholders are supposed to consider approving the sale of its interest in the Senegal RSSD project to Woodside.

FAR added that its directors continue to support the Woodside sale.

The company stated that, if a previous takeover offer from Remus Horizons or any alternative offer emerges, the directors will update shareholders accordingly and may reconsider their recommendation.

To remind, Remus Horizons made a conditional non-binding indicative proposal in December 2020 to engage in further discussions for the purpose of evaluating its capacity to make an offer or announce an intention to make an offer to acquire 100 per cent of the shares of FAR at 2.1c cash per share.