Beach Energy Ltd (ASX: BPT) today announced a recommended and unconditional on-market cash offer for all of the issued and outstanding shares of Impress Energy Ltd (ASX: ITC) that it does not own.

The offer price is 8.5 cents per share and the offer is unconditional. Beach has instructed its broker, Euroz Securities Ltd, to purchase at the offer price, every Impress share for sale during the period from today to the close of the Australian Securities Exchange on January 24 next year unless extended or withdrawn.

The offer values Impress at $75 million and replaces the previously announced merger between Beach and Impress via a scheme of arrangement. Beach and Impress have agreed to terminate the merger implementation agreement entered into on November 22 this year on the basis that the offer by Beach is made.

Beach currently holds a 19.9 per cent stake in Impress through on-market purchases and the sale of shares by entities associated with Mr Eddie Smith, Impress' Chairman, and Mr John Gillon, an Impress Director.

The offer price represents a quarter of a cent increase on the merger proposal price under the scheme of arrangement and a 39 per cent premium to the one month volume weighted average price of 6.1 cents per share before the announcement of the proposed merger on 22 November 2010.

The offer has been launched as a result of the Victoria Petroleum NL (ASX: VPE) announcement that it increased its holding in Impress to 20 per cent and stated its current intention to vote against the scheme of arrangement.

In seeking to block the scheme of arrangement, VicPet made it clear in a statement to the ASX that it did not presently intend to make a competitive takeover bid for Impress.

Beach Managing Director Reg Nelson said his Board considered VicPet's intentions to be contrary to the interests of other Impress shareholders and put at risk the opportunity for Impress shareholders to monetise their investment.

"We believe VicPet's recent actions do not deliver the best outcome for Impress shareholders and the on-market cash offer proposed by Beach is the best way for Impress shareholders to realise the value of their investment," said Mr Nelson.

"By making this offer, Beach is extending an opportunity for all Impress shareholders to have access to a slightly improved financial return than they would have enjoyed if the scheme were to have succeeded."

As of December 3 this year, Beach has an available cash balance of approximately $189 million that provides the company with a clear ability to fund the offer from its existing cash reserves.

The offer will enable Beach to consolidate its position as the largest mid cap player in the Cooper Basin which is in line with Beach's stated growth strategy to double production and reserves in 2 to 5 years.