Magellan Petroleum Rejects Stratex’s Acquisition Offer

- September 10th, 2012

Magellan Petroleum Corp. (NASDAQ:MPET,ASX:MGN) announced that it has decided not to pursue Stratex Oil & Gas Holdings Inc.’s (OTCBB:STTX) unsolicited proposal to acquire each of Magellan’s outstanding shares for $0.65 and one Stratex share.

Magellan Petroleum Corp. (NASDAQ:MPET,ASX:MGN) announced that it has decided not to pursue Stratex Oil & Gas Holdings Inc.’s (OTCBB:STTX) unsolicited proposal to acquire each of Magellan’s outstanding shares for $0.65 and one Stratex share.

According to the press release, Magellan’s reasons for its decision include:

  • Stratex is a development stage company that lacks significant financial or other assets;
  • the audit opinion dated June 27, 2012, for the most recent audited financial statements of Stratex Oil & Gas, Inc. contains an explanatory paragraph regarding factors which raise substantial doubt about Stratex’s ability to continue as a going concern, and the financial statements in Stratex’s Form 8-K dated July 6, 2012, contain the following statement: “the company (Stratex) believes its current available cash along with anticipated revenues may be insufficient to meet its cash needs for the near future.”;
  • the proposed transaction presents significant corporate governance concerns for Magellan shareholders given, among other things, the effective 100,000,000 share super-voting rights in Stratex held by the two principal officers of Stratex;
  • the majority of the asserted value of the Stratex proposal is based on the value of Stratex common stock, a security with extremely limited trading volume that trades only sporadically; and
  • the manner in which Stratex has reported its oil and gas reserve quantities, future net cash flows, and the number of its gross and net wells raises concerns about accurately understanding the value of these metrics.

Click here to read the full Magellan Petroleum Corp. (NASDAQ:MPET,ASX:MGN) press release.

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