88 Energy Limited (ASX:88E) made an offer to acquire XCD Energy Limited (ASX:XCD) from a group of shareholders for AUD 5.8 million on April 24, 2020. Under the terms, 1.67 new 88 Energy shares will be issued for every XCD Energy share held and 0.5 new 88 Energy shares for every XCD Energy listed option held. On May 6, 2020, a Bid Implementation Agreement is signed. As per the agreement, the consideration revised to AUD 8.4 million. 88 Energy Limited will now pay 2.4 new 88 Energy shares for every XCD Energy share and 0.7 new 88 Energy shares for every XCD Energy listed option. 88 Energy Limited will acquire 699.7 million common shares, 117.5 million options and 20 million performance rights of different classes. As per the initial offer, XCD Energy Limited security holders will hold up to 15% of the combined group. As per the agreement signed, XCD security holders will hold 20% of the combined group. Post completion, XCD Energy Limited will operate as a wholly owned subsidiary of 88 Energy Limited. A termination fee of AUD 0.15 million is payable by 88 Energy Limited or XCD Energy Limited for terminating the transaction. After 88 Energy has a relevant interest in more than 50% of the XCD Energy shares and the offers become or is declared unconditional, XCD Energy must take all actions necessary to ensure the resignation and appointment of Directors of XCD Energy such that a majority of the directors of XCD Energy are directors nominated by 88 Energy in writing, but provided that a minimum of two of the existing XCD Energy Board remain, a proper board is constituted at all times. On June 22, 2020, XCD announced that the Board of XCD Energy has been restructured and now comprises a majority of directors nominated by 88 Energy, the appointment of three Directors nominated by 88 Energy and its Chairman. The three 88 Energy nominees appointed to the XCD Board are Michael Evans, David Wall and Ashley Gilbert. Peter Stickland to have resigned from the Board.

The Proposed offer is subject to only a limited number of conditions, including a 90% minimum acceptance condition in relation to shares and listed options of XCD, no material adverse changes, absence of third party rights on a change of control, no regulatory action or interference, no shop, no talk rights no material acquisitions or disposals and no prescribed occurrences. The XCD Board advises shareholders at this time to take no action and await the XCD Board's formal response to the offer including the directors' recommendation. The Board of Directors of XCD Energy unanimously recommend to XCD Energy shareholders and listed option holders that they accept the offer. All of the Directors of XCD Energy intend to accept, or procure the acceptance of the offer. Major XCD Energy shareholders have entered into pre-bid acceptance agreements with 88 Energy in respect of 18.5% of shares on issue and 6.8% of listed options on issue. The 88 Energy Board of Directors has established an independent board committee. 88 energy is entitled to compulsorily acquire remaining shares of XCD after acquiring at least 90% of issued share capital of XCD. The offer period is from May 18, 2020, to June 18, 2020. As of May 21, 2020, the offer period has extended from May 25, 2020, to June 25, 2020. As on June 16, 2020, 88 Energy received acceptance for 262.964620 million shares representing 37.58% stake and 21.507143 million options representing 18.31% of listed options. Importantly, all of XCD Energy's directors have now accepted the Offers in respect of their own holdings. As of June 17, 2020, the offer becomes unconditional. As on June 24, 2020, 88 Energy had a relevant interest in 79.84% of XCD Energy's shares and 79.22% of XCD Energy's listed options. The offer period has been extended to from June 25, 2020 to July 13, 2020. 88 Energy confirms that any XCD Energy shareholders and listed option holders who are yet to validly accept the offers made to them will be issued with their 88 Energy shares within 7 business days of their acceptance being processed. On July 6, 2020, 88 Energy Limited advise that it has now reached a level of ownership in shares and options of XCD Energy Ltd that guarantees it will reach the minimum threshold required for compulsory acquisition. 88 Energy intends to move to compulsory acquisition of any outstanding XCD Energy shares and listed options under corporation Act. When this occurs, XCD Energy security holders who have their XCD Energy shares and listed options acquired compulsorily will not be eligible for accelerated payment terms. XCD Energy Limited will be delisted from the ASX market, if the acquisition does not complete. As on July 8, 2020, 88 Energy Limited had acquired 90.97% of the shares in XCD Energy and 93.31% of XCD Energy's listed options. 88 Energy will now proceed to acquire the remaining XCD Energy shares and listed options under the compulsory acquisition.

Darren Martin of Longreach Capital, Neil McDonald and Derrick Lee of Cenkos Securities plc acted as financial advisors for 88 Energy Limited and Steinepreis Paganin acted as the legal advisor to 88 Energy Limited. Steinepreis Paganin will receive approximately $130,000 for its services. GTP Legal acted as legal advisor to XCD Energy Limited. Matthew Davies of Taylor Collison Limited acted as financial advisor and BDO Corporate Finance (WA) Pty Ltd at an advisory fee of AUD 0.03 million acted as fairness opinion provider to XCD Energy Limited. 88 Energy Limited agreed to pay a transaction fee of 50% cash and 50% in shares to Longreach Capital. In total, 88 Energy Limited issued 40.437763 million shares to Longreach Capital.