Mitsui's bid is gaining speed as it receives AWE's backing within a week and already has FIRB approval.

Mitsui's bid is gaining speed as it receives AWE's backing within a week and already has FIRB approval.Credit:Glenn Hunt

The new deal – which has already obtained Foreign Investment Review Board approval – will now be lodged with the Australian Securities and Investments Commission within the week.

It is not conditional on due diligence,financing or internal approvals.

AWE also formally rejected China Energy Reserve and Chemical Group’s (CERCG) bid on Monday.

The approval of Mitsui’s bid,valuing AWE at 95 cents a share - a 14 per cent premium to the MinRes proposal - is the culmination of a bidding war to gain access to the highly prospective Waitsia gas asset.

Late last year,AWE was the target in a duel between MinRes and CERCG as they attempted to gain control of Waitsia,which is one of the largest onshore gas discoveries in Australian history.

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At the time,MinRes beat out its rival with an eventual offer of 83 cents a share,which included a mix of cash and scrip.

The rival bid on the table from CERCG was an all-cash offer of73¢ a share,or $463 million.

This was all upended last month whenMitsui made an unsolicited 95 cents a share,all-cash offer.

A source close to the latest deal said there was likely to be significant shareholder support for the proposal.

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“Mitsui has got plenty of strength,so its bid should be attractive to shareholders as they are getting cash and they don’t have to rely on scrip,” he told Fairfax Media.

AWE chairman Ken Williams welcomed the Japanese firm’s involvement in the company.

“The Mitsui proposal,being all cash and pitched at a significant premium to the competing offer received by the AWE board,represented a superior value proposition,” Mr Williams said.

AWE chief executive David Biggs added that it was satisfying to see the value of Waitsia recognised.

As part of the rejection of the MinRes deal,AWE will have to pay a $6 million break fee.

MinRes was approached for comment.

Rothschild is acting as financial adviser and Herbert Smith Freehills is legal adviser to Mitsui.

AWE last traded at 98.5 cents a share,a 3.68 per cent increase on Mitsui’s 95 cents a share bid.

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