Senex Energy : enters into binding scheme with POSCO International

For personal use only

ASX Announcement

13 December 2021

Senex enters into binding scheme implementation agreement with POSCO INTERNATIONAL Corporation

Key points

• PIC to acquire 100% of Senex shares for a cash offer price of A$4.60 per share, via a scheme of arrangement ("Scheme")
• Cash offer price represents a 25% premium to the 30-day VWAP1 and a 34% premium to the 90-day VWAP up to 15 October 2021, the trading day prior to the first public announcement of takeover discussions
• In addition, Senex's current intention is to pay a dividend of up to A$0.05 per share for the half year ending 31 December 2021 in the ordinary course, subject to review by the Board at that time
• Senex Board unanimously recommends that shareholders vote in favour of the Scheme (subject to the conditions below)
• Key conditions of the Scheme include Senex shareholder approval and FIRB approval
• If approved, the Scheme is expected to complete in late March 2022

Senex and PIC enter into a binding scheme implementation agreement

Senex Energy Limited (Senex, ASX:SXY) announces that it has entered into a binding Scheme Implementation Agreement ("SIA") with POSCO INTERNATIONAL Corporation ("PIC"), whereby PIC will acquire 100% of Senex's shares for a cash offer price of A$4.60 per share. The SIA is enclosed with this announcement.

In addition to the cash offer price, Senex's current intention is to pay a dividend of up to A$0.05 per share for the half year ending 31 December 2021 in the ordinary course, subject to review by the Board at that time. This dividend will not be conditional on the implementation of the Scheme and remains subject to review by the Senex Board at the time. Senex's dividend reinvestment program will not apply to this interim dividend.

The Senex Board unanimously recommends that shareholders vote in favour of the Scheme, in the absence of a Superior Proposal and the Independent Expert concluding (and continuing to conclude) that the Scheme is fair and reasonable and therefore in the best interests of shareholders. Senex Directors intend to vote all shares they hold or control in favour of the Scheme, subject to these same conditions.

Commenting on today's announcement Senex Chairman Trevor Bourne said:

"Throughout our discussions with PIC, the Senex Board has been focused on maximising value for our shareholders.

"The offer announced today, which is recommended by the Board, reflects an attractive value for Senex and the opportunity for our shareholders to realise a certain cash price for their shares," Mr Bourne said.

1 VWAP means the volume weighted average share price of Senex on ASX

Senex Energy Limited	Head Office	Phone [phone]
ABN 50 008 942 827	Level 31, 180 Ann Street, Brisbane Qld 4000	Facsimile [phone]
ASX: SXY	GPO Box 2233, Brisbane Qld 4001	Web www.senexenergy.com.au	Page 1 of 2

For personal use only

The Scheme is conditional upon a Senex shareholder approval, Court approval, Foreign Investment Review Board ("FIRB") approval, Korean foreign exchange approval, completion of the proposed acquisition of natural gas fields PL 209 and PL 445 and other customary conditions for a transaction of this nature.

A Scheme Booklet containing information in relation to the transaction, the reasons for the Senex Board of Directors' recommendation, an independent expert's report and details of the Scheme will be sent to Senex shareholders in early 2022. Senex has appointed Lonergan Edwards & Associates as the Independent Expert.

Senex expects a Scheme Meeting to occur in March 2022 and, if approved, the transaction is expected to complete in late March 2022.

Senex notes that, whilst PIC has announced its intention that Hancock Energy Corporation will acquire a 49.9% indirect interest in Senex should the Scheme be successful, this is not a condition to the Scheme proceeding.

Senex has appointed Macquarie Capital and Rothschild & Co as financial advisers and Clayton Utz as legal adviser. Senex will continue to keep investors updated on the transaction in line with its continuous disclosure obligations.

Approved for release by the Senex Board

Contact details:

Investor Enquiries	Media Enquiries
Ian Davies	Jim Kelly
Managing Director & CEO	Partner
Senex Energy Limited	Domestique
Email:[e-mail]	Email:[e-mail]
Phone: [phone]	Phone: [phone]

About Senex

Senex is an established, rapidly growing low-carbon Australian natural gas producer. Our long-life Surat Basin assets contribute around 20 petajoules of natural gas per year into the east coast gas market to support our customers. Senex is focused on sustainably delivering balance sheet strength, resilient cashflows, growing dividends to support Australia's energy needs as it transitions to a lower carbon future. 

Senex Energy Limited	Head Office	Phone [phone]
ABN 50 008 942 827	Level 31, 180 Ann Street, Brisbane Qld 4000	Facsimile [phone]
ASX: SXY	GPO Box 2233, Brisbane Qld 4001	Web www.senexenergy.com.au	Page 2 of 2

For personal use only

Scheme Implementation Agreement

Senex Energy Limited

Target

POSCO INTERNATIONAL Corporation

Bidder

L342937294.1

For personal use only

Contents

1.	Definitions and interpretation..............................................................................	1
	1.1	Definitions ..............................................................................................	1
	1.2	Best and reasonable endeavours........................................................	11
	1.3	Business Day.......................................................................................	12
	1.4	Interpretation........................................................................................	12
2.	Agreement to propose Scheme.........................................................................	13
3.	Conditions precedent .........................................................................................	13
	3.1	Conditions............................................................................................	13
	3.2	General obligations in relation to Conditions.......................................	16
	3.3	Obligations in relation to regulatory approvals ....................................	16
	3.4	Notice in relation to satisfaction of Conditions.....................................	17
	3.5	Waiver of Conditions............................................................................	17
	3.6	Termination on failure of Conditions....................................................	18
4.	Implementation of Scheme ................................................................................	19
	4.1	Scheme................................................................................................	19
	4.2	Timetable .............................................................................................	19
	4.3	Appointment of nominee and guarantee .............................................	19
	4.4	Target's obligations..............................................................................	20
	4.5	Bidder's obligations..............................................................................	23
	4.6	Dispute as to Explanatory Memorandum ............................................	25
	4.7	Reconstitution of Target Board............................................................	25
	4.8	Responsibility statement......................................................................	25
	4.9	Removal of Target from official list of ASX ..........................................	26
	4.10	Court representation ............................................................................	26
5.	Scheme Consideration .......................................................................................	26
	5.1	Scheme Consideration ........................................................................	26
	5.2	Bidder undertakings in relation to Scheme Consideration ..................	26
	5.3	Rounding up ........................................................................................	27
6.	Conduct of business...........................................................................................	27
	6.1	Conduct of Target's business ..............................................................	27
	6.2	Access .................................................................................................	31
	6.3	Payment of Target HY22 Dividend ......................................................	31
	6.4	Target Incentives .................................................................................	31
	6.5	Facilities ...............................................................................................	32
7.	Recommendation, intentions and announcements ........................................	32
	7.1	Target Board Recommendation and Voting Intention .........................	32
	7.2	Announcements...................................................................................	33
8.	Exclusivity arrangements ..................................................................................	34
	8.1	Existing discussions.............................................................................	34
	8.2	No shop ...............................................................................................	34
	8.3	No talk..................................................................................................	34
	8.4	No due diligence ..................................................................................	35
	8.5	Limitation to no talk and no due diligence ...........................................	35
	8.6	Notification obligation...........................................................................	35
	8.7	Matching right ......................................................................................	36
	8.8	Compliance with law ............................................................................	37
	8.9	Normal provision of information...........................................................	37
9.	Reimbursement of Costs....................................................................................	38
	9.1	Background to Target Payment...........................................................	38
	9.2	Target Payment ...................................................................................	38
L342937294.1	Scheme implementation agreement	i

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	9.3	Timing ..................................................................................................	39
	9.4	Basis of Target Payment .....................................................................	39
	9.5	No payment if Scheme becomes Effective..........................................	39
	9.6	Target Payment payable once.............................................................	39
	9.7	Exclusive Remedy ...............................................................................	40
	9.8	Compliance with law ............................................................................	40
10.	Expense Reimbursement Fee............................................................................	40
	10.1	Background to Expense Reimbursement Fee.....................................	40
	10.2	Expense Reimbursement Fee .............................................................	40
	10.3	Timing ..................................................................................................	40
	10.4	Basis of Expense Reimbursement Fee ...............................................	41
	10.5	No payment if Scheme becomes Effective..........................................	41
	10.6	Expense Reimbursement Fee payable once ......................................	41
	10.7	Compliance with law ............................................................................	41
11.	Liability of directors, officers and employees .................................................	42
	11.1	Liability of directors, officers and employees.......................................	42
	11.2	Directors and officers insurance ..........................................................	42
	11.3	Obligations in relation to directors and officers insurance...................	43
	11.4	Directors and officers indemnities .......................................................	43
	11.5	Compliance with law and benefit .........................................................	43
12.	Representations, warranties and indemnities .................................................	43
	12.1	Representations and warranties by Bidder .........................................	43
	12.2	Reliance on Bidder Warranties............................................................	45
	12.3	Representations and warranties by Target .........................................	45
	12.4	Qualification of Target Warranties .......................................................	47
	12.5	Reliance on Target Warranties............................................................	48
	12.6	Notifications .........................................................................................	48
	12.7	Status of representations and warranties ............................................	48
	12.8	Status and enforcement of indemnities ...............................................	48
	12.9	Timing of representations and warranties ...........................................	48
13.	Confidentiality and communications ................................................................	48
	13.1	Confidentiality Deed.............................................................................	48
	13.2	Survival of obligations..........................................................................	49
	13.3	Disclosure on termination of agreement..............................................	49
14.	Termination and remedies .................................................................................	49
	14.1	Limited termination events...................................................................	49
	14.2	Termination by Bidder..........................................................................	49
	14.3	Termination by Target..........................................................................	49
	14.4	Termination by written agreement .......................................................	50
	14.5	Effect of termination.............................................................................	50
	14.6	Notice of termination............................................................................	50
	14.7	Remedies.............................................................................................	50
	14.8	Target's limitation of liability.................................................................	50
15.	Notices	.................................................................................................................	51
	15.1	How notice to be given ........................................................................	51
	15.2	When notice taken to be received .......................................................	51
	15.3	Notices sent by more than one method of communication .................	52
16.	GST .......................................................................................................................	52
	16.1	Interpretation........................................................................................	52
	16.2	Reimbursements and similar payments ..............................................	53
	16.3	GST payable........................................................................................	53
17.	General .................................................................................................................	53
	17.1	No representation or reliance ..............................................................	53
L342937294.1	Scheme implementation agreement	ii